Australia’s iron ore export earnings are forecast to ease from A$121 billion expected in 2022-23, reflecting higher production volumes and stable prices, to around A$100 billion by 2023-24 and to around A$75 billion by 2027-28, due to an expectation of lower iron ore prices, according to the quarterly outlook report by the Australian government’s Department of Industry, Innovation and Science.
Following a fall in iron ore prices to around US$85/mt in November last year, the benchmark iron ore spot price has recovered to average around US$115/mt in the January-March quarter this year.
With China’s easing of its zero-Covid policy late last year, the country’s steelmaking is expected to recover in 2023, providing support for iron ore demand in the first half of this year. A stabilization of China’s residential property sector is also a critical factor in global iron ore demand this year. In addition, with blast furnace steelmaking output forecast to rise close to six percent in 2023, iron ore imports in Europe, East Asia and Southeast Asia and the Middle East are expected to increase.
The report pointed out that the benchmark iron ore price is projected to average around US$100/mt in 2023 and around US$63/mt in 2028.