During the SteelOrbis Spring 08 Conference & 58th IREPAS meeting held in Istanbul, Mr. Tony Trickett from the International Iron and Steel Institute (IISI) spoke on the subject of the international iron ore and coking coal markets.
In his presentation, Mr. Trickett gave details of the IISI's forecasts for the development of the global iron ore and coking coal markets.
According to the IISI, iron ore and coking coal mining companies across the world are unable to meet global demand, with the worldwide iron ore supply deficit expected to exceed 20 million mt in 2008. The imbalance of demand and supply in the international market has occurred because of the restrictions put on production and also because of logistic problems. Meanwhile, prices for iron ore have increased by 4.5 times since 2003 because of the imbalance which has been created. This imbalance, according to Mr. Trickett, can be resolved by 2010-2014, when additional capacities will reach the market. Till then, the market supply is expected to remain tight, causing prices to continue to rise.
A similar situation is being observed in the international coking coal market. Currently, steel producers in many regions across the world have difficulties in meeting their coking coal needs. Although China, as the largest producer of steel, consumes the largest amount of coking coal, the country has not put additional weight on the international market as it produces enough coking coal to satisfy domestic demand for the moment. On the other hand, according to Mr. Trickett, the main increase in demand for coking coal will come from India, which plans to expand its steel production capacity.
Meanwhile, since the main coking coal supplier to the international market is Australia, the international market is very dependent on exports from this country. For instance, due to floods in February, in March many coking coal suppliers in Australia imposed force majeure on their shipments, thereby causing hard times in the international market.
In conclusion, Mr. Trikett stated that since demand for iron ore and coking coal is growing faster than supply, the international markets for these raw materials will be tight for at least a couple of years, until the new resources of iron ore and coking coal are found.