The iron ore market Mining on top Helsinki Anton Löf, Raw Materials Group Mining On Top: Helsinki 2013 16-17 September 2013 | Helsinki

1. Anton Löf (Magnus Ericsson)
Senior Iron Ore Analyst, Raw Materials Group
anton.lof@rmg.se
The iron ore market
Mining on top Helsinki

2. About IntierraRMG
• 30 years leadership in data, mapping, analysis
and reporting.
• Lease ownership, company evaluations, M&A,
due diligence, production statistics and project pipeline.
• Market and project reports, material flows analysis
and mineral economics policy
Disclaimer:
IntierraRMG makes reasonable and diligent efforts to obtain accurate information for our clients and presentations. No warranty, expressed or implied is made regarding the accuracy, adequacy,
completeness, reliability, or usefulness of any information contained herein. Neither IntierraRMG nor the contributors of data to this presentation shall be held liable for any improper or incorrect use of
the information contained herein and assume no responsibility for the use of the information.

3. Raw Materials Group
• Part of the IntierraRMG group since 2012
• 30 years industry leadership in data, mapping,
analysis and reporting.
• IntierraLive and Raw Materials Data.
• Strategy development
– Mining companies, equipment & service
• Mineral policy, investment promotion
– Governments, International organisations
• Pre-feasibility/Feasibility studies
– Financial institutions, companies

4. • UNCTAD Iron Ore Trust Fund.
• Steel production
• Iron ore production
• Iron ore trade
• Iron ore prices
• Corporate concentration
• Capacity
• Outlook
• Summary
Outline

5. UNCTAD Iron Ore Trust Fund
• 1987, since 2002 with Raw Materials Group of
Sweden.
• Two annual publications
–Iron Ore Market Review in May
–Iron Ore Statistics in September
• Half year update in November
• Financed by sales and contributions from
Australia, Brazil, Canada, Sweden and US.
• Contact ironore1@unctad.org for information.
• Iron ore market available in Chinese

6. Steel production

7. Crude steel production
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Rest of the world
China

8. Iron ore supply

9. Iron ore mines 2012
Source: Raw Materials Data Iron ore, 2013.

10. Global iron ore production
Source: UNCTAD, Raw Materials Data Iron ore, 2013.
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Australia
China
India
Brazil
Russian Federation
Other

11. Chinese production
0
200
400
600
800
1 000
1 200
1 400
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
China iron ore
production
China ore
production
(unconverted)

12. RMG top companies 2012
Rank
2012
Controlling entity Country Controlled Share
of Total
production (Mt)
World prod % Rank 2011
1 Vale (Cia Vale do Rio Doce) Brazil 320 17.2 1
2 Rio Tinto UK 197 10.7 2
3 BHP Billiton Australia 187 10.0 3
4 Fortescue Metal Group Australia 61 3.3 6
5 State of India 1) India 59 3.2 5
6 ArcelorMittal Luxemburg 58 3.1 4
7 Anglo American UK 47 2.5 7
8 Cliffs Natural Resources USA 46 2.5 8
9 Metalloinvest Russia 40 2.1 9
10 System Capital Management Ukraine 31 1.7 10
Total, 10 largest 1046 56.3
Total, World 1863 100.0
Source: Raw Materials Data Iron ore, 2013.

13. Iron ore trade

14. Global iron ore exports
Source: UNCTAD, Raw Materials Data Iron ore, 2013.
0
200
400
600
800
1 000
1 200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Australia
India
South Africa
Brazil
Canada
CIS
Other

15. Global iron ore imports
Source: UNCTAD, Raw Materials Data Iron ore, 2013.
0
200
400
600
800
1 000
1 200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Other
EU27
Japan
Korea, Republic of
China, Taiwan Province of
China

16. Chinese iron ore imports
Source: Raw Materials Data Iron ore, 2013.

17. Iron ore prices

18. Iron ore prices, TSI 62 % Fe
0
50
100
150
200
250
05/01/2009
16/06/2009
30/07/2009
15/09/2009
29/10/2009
14/12/2009
01/02/2010
17/03/2010
05/05/2010
21/06/2010
04/08/2010
20/09/2010
03/11/2010
17/12/2010
04/02/2011
22/03/2011
11/05/2011
27/06/2011
10/08/2011
26/09/2011
09/11/2011
23/12/2011
10/02/2012
27/03/2012
15/05/2012
02/07/2012
15/08/2012
01/10/2012
14/11/2012
02/01/2013
26/02/2013
16/04/2013
06/06/2013
23/07/2013
USD
TSI 62 % Fe CFR Tianjin Port US$/t
Iron ore fines 62 % Fe, USD/t
Average yearly price

19. Corporate concentration

20. Production - Increased geographical
concentration
18%
22%
11%8%
9%
6%
6%
20%
2000
Australia
Brazil
China
India
Russian Federation
Ukraine
United States
Others
28%
20%
15%
8%
6%
4%
3% 16%
2012
Australia
Brazil
China
India
Russian Federation
Ukraine
South Africa
Others
• In 2000 the 3 largest producing countries had 51% of the market. In 2012 it had
increased to 63%
• In 2000 the 5 largest producing countries had 68% of the market. In 2012 it had
increased to 77%

21. Export - Increased geographical concentration
• In 2000 the 3 largest exporting countries had 71% of the market. In 2012 it had
increased to 76%
• In 2000 the 5 largest exporting countries had 80% of the market. In 2012 it had
increased to 82%
33%
32%
7%
5%
4%
4%
3% 12%
2000
Australia
Brazil
India
Canada
South Africa
Ukraine
Sweden
Others
42%
29%
5%
3%
3%
2%
2%
14%
2012
Australia
Brazil
South Africa
Ukraine
Canada
Russian Federation
Sweden
Others

22. Corporate control over time
0
10
20
30
40
50
60
1985 1990 1995 2000 2005 2010 2011 2012
%
1
3
10
Source: Raw Materials Data

23. Capacity

24. Capacity additions 2013-2015
• Total project pipeline contains 771
Mt of iron ore capacity to come on
stream within the next 3 years.
• The project pipeline are based on
companies statements on project
completion
• Not all projects will be finalized in
time but delays rarely exeds 3 years.
• It can be assumed with some degree
of confidence that around 500 Mt
with a low of 390 and a high of 580
Mt of new capacity will come on
stream in the period to and including
2015.
0
50
100
150
200
250
300
350
400
2010 2011 2012
Mt
Capacity to come online within
the next 3 years
Possible
Probable
Certain

25. Outlook

26. Iron ore projects
Source: Raw Materials Data Iron ore, 2013.

27. Project pipeline by region
32%
29%
13%
11%
11%
4%
Oceania
Latin America
Africa
Europe
Asia
North America

28. Chinese crude steel production
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
kt
2009
2010
2011
2012
2013

29. Global iron ore cash cost
Source: Raw Materials Data Iron ore, 2013.

30. Conclusions
Summary
Molybdenum drawing: Kaianders Sempler.

31. Summary
We estimate that the world iron ore market will be characterized
by tight conditions for at least a few years to come, although
prices will decline, as new production comes on stream, they
will remain on a high level. The main factors influencing the
market include:
• Chinese steel demand, While demand drivers remain in place,
will grow considerably slower than during the past decade,
while demand in the rest of the world will pick up.
• World steel demand and production will increase at rates that
are high in a historical perspective but nevertheless lower
than during the previous decade.
• Increasing supply constraints.
• Chinese iron ore production will remain significantly lower
than domestic demand.

32. Anton Löf
PO Box 3127
SE-169 03 Solna, Sweden
anton.lof@rmg.se
Tel: +46-8-744 00 65
Fax: +46-8-744 0066
www.rmg.se
www.intierrarmg.se
Thank you !
NIckel drawing: Kaianders Sempler.

33. Metals first isolated in
Sweden/Finland
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