The Australian government's Department of Industry, Innovation and Science has said in its quarterly outlook report that Australia’s iron ore export values are set to rise from A$79 billion in 2018–19 to A$101 billion in 2019–20, as volumes and prices grow. Over the rest of the outlook period, as prices ease, exports are forecast to fall to A$84 billion in 2020–21 and to A$72 billion by 2024-25.
The report also suggested that iron ore export volumes from the country are expected to grow from 874 million mt in 2019–20 to 898 million mt by 2020–21, and to 996 million mt by 2024–25, largely as a result of production commencing at several large new mines in Western Australia.
Regarding iron ore prices, a gradual decline is expected over the next few years. Real prices are expected to fall from about US$86/mt in the March quarter of 2020, to US$78/mt in the June quarter of 2020, and to US$71/mt by the March quarter of 2021.
Prices face downward pressure in the near term, due to the impact of the Covid-19 outbreak and flat global steel demand. The uncertainty created by Covid-19 is assumed to recede in the second half of 2020, and short-term weather disruptions in Australia and Brazil are expected to pass by the end of March. Rising supply in Brazil will likely put considerable downward pressure on prices over the coming quarters. However, further disruptions among major producers, unexpected delays in restoring production, or additional Chinese stimulus measures could each put countervailing upward pressure on prices over the next year, the report noted.