Australia, the world's largest iron ore exporter, said on March 2 that increased export volumes and higher prices are expected for Australian iron ore as well as other raw materials needed for steelmaking.
In a report titled ‘Australian Commodities, March Quarter 2010', the Australian Bureau of Agricultural and Resource Economics said that higher raw material demand is projected due to higher steel production, particularly in China and India in the days ahead.
As the world's largest exporter of iron ore and metallurgical coal, increased import demand will underpin significant increases in Australia's exports of steelmaking raw materials over the medium term, the report commented, adding that iron ore and metallurgical coal contract prices are expected to increase sharply due to rocketing demand.
BHP Billiton, Rio Tinto and Fortescue Metals Group, the three biggest producers in Australia, are expanding iron ore mines in the country to meet revived demand.
Production of metals and other minerals in general is forecast to increase by six percent in the 12 months ending June 30, 2010, which mainly reflects a strong increase in iron ore production, and is forecast to increase 21 percent while production is forecast to increase by around seven percent in the next financial year, the report said.
Iron ore exports may rise to AU$35 billion ($31 billion) in the 12 months ending June 30, 2011, from AU$29 billion ($26.2 billion) this year, the bureau forecast.
World trade of iron ore is projected to increase at an average annual rate of six percent between 2009 and 2015, growing to 1.3 billion mt by the end of the outlook period, the Australian Bureau of Agricultural and Resource Economics also pointed out. By 2015, Australian exports are projected to account for 42 percent of world trade, it said.
Meanwhile, sales of metallurgical coal from Australia, are forecast to rise 5.3 percent in calendar year 2011 to 158 million mt, while sales may gain 30 percent rising to AU$30 billion ($27 billion) in FY 2011, the bureau said.