Australia to see higher iron ore earnings in 2021 amid high prices

Monday, 29 March 2021 13:36:20 (GMT+3)   |   Istanbul

As iron ore prices surged in December last year and January this year, reaching the highest level since 2011, Australia’s export earnings are forecast to reach above A$136 billion by 2021-22, according to the quarterly outlook report by the Australian government’s department of Industry, Innovation and Science. Australia’s iron ore export values hit a new record of A$104 billion in 2019-20.

The iron ore export volumes from the country are expected to grow from around 900 million mt in 2020-21 to 1.1 billion mt by 2025-26 as several mines open or expand in Western Australia.

Iron ore prices rose to over $140/mt at the end of 2020, driven by high demand in China and supply disruptions in Brazil. Prices of ore are forecast to remain well above $100/mt until late 2021, before easing gradually over subsequent years, ultimately trending at $72/mt by the end of 2026. A shift back towards more typical prices is expected to reduce earnings in subsequent years, although iron ore is still expected to earn over A$100 billion every year over the outlook period, with a cumulative total of above A$700 billion earned by 2025–26.

According to the report, the global iron ore trade remains dominated by Australia, which exported more than half of global seaborne iron ore in 2020. However, iron ore output from South America and Africa is expected to increase over the outlook period. Brazilian iron ore output is expected to recover to pre-dam collapse levels by early 2022. Prices for Brazilian ore rose by more than 50 percent in December 2020 compared to December 2019. Brazil’s export volumes recently showed signs of a significant recovery, increasing to 33 million mt by December 2020. The global iron ore markets are expected to remain tight, with slow growth in both supply and demand over the next five years. The market structure is not expected to alter significantly, with Australia’s market share expected to hold up, the report noted.

Most Recent Related Articles

Manganese ore exports via Port Hedland down 1.7 percent in March

Iron ore exports via Port Hedland up 24.5 percent in Mar from Feb

GFG Alliance steel plants in Australia at risk of closure amid court action

Australia’s Mineral Resources produces first iron ore at Wonmunna

Pakistan’s scrap imports down 13.2% in February from January