According to the Resources and Energy June Quarter report released by the Australian Bureau of Resources and Energy Economics (BREE),
Australia's
iron ore exports forecast for 2013 remains at 570 million mt, with an annual growth expectation of 16 percent. Investment over the past several years in expansions to existing mines as well as in new mines, predominantly in Western
Australia, are expected to support substantial growth in
iron ore exports from
Australia over the outlook period. Between 2014 and 2018,
Australia's
iron ore exports are projected to increase at an average annual rate of eight percent a year to total 847 million mt in 2018.
In 2013, Brazil's
iron ore exports are forecast to increase by 2.8 percent, relative to 2012, to 336 million mt. According to the BREE report, if safety and commercial issues on the landing of Valemax ships in China are resolved, this could boost Brazil's exports in the short term and also increase exporters' margins. Between 2014 and 2018, Brazil's exports are projected to increase at an annual average rate of six percent to total 447 million mt in 2018.
On the other hand, in 2013 India's net exports are forecast to total 12 million mt, down from an estimated 25 million mt in 2012. Over the next few years, bans on
mining in India's key
iron ore producing states are expected to continue to impact on production. However, it is expected that in an effort to bolster
iron ore exports to take advantage of a devalued rupee, the Indian government will act to reduce bans while also ensuring supply for domestic steelmakers.
Meanwhile, the outlook for the Australian steel commodity market shows that
iron ore spot prices for 62 percent
iron ore content FOB
Australia averaged at around US$118/mt in the June quarter of 2013, down from an average of US$141/mt in the March quarter. Spot prices have since recovered and are expected to average around US$122/mt for the September quarter. According to BREE, for the whole of 2013 contract prices for
iron ore are forecast to average US$125/mt, although there is a possibility of a stronger price decline in the December 2013 quarter as additional supply enters the market.