Iron Ore: Bolstered By Major Miners
BMI View: Major iron ore miners in Australia and Brazil look set to press ahead with a series of expansion plans despite the dull outlook in the global mining sector. While China's economic slowdown will be a drag on iron ore prices, these miners will continue to enjoy healthy profit margins due to low production costs. Aside from the traditional players, West Africa will gradually emerge as a centre of iron ore production over the coming years. We forecast global iron ore output to reach 2.5bnt by 2017, increasing at an annual average rate of 4.5%.
While miners across the board are feeling the heat of lower commodity prices and escalating cash costs, we believe the outlook in the global iron ore industry remains relatively sound. We forecast global iron ore output to reach 2.5bn tonnes (bnt) by 2017, increasing at an annual average rate of 4.5%. Encouragingly, the big three iron ore miners - BHP Billiton (BHP), Rio Tinto (Rio) and Vale -are pushing ahead with a series of expansion plans despite the economic slowdown in China. These miners, which provide around 70% of the seaborne trade, will continue to capture sizable profit margins with their crushingly low production costs in Australia and Brazil.
Australia Stands Above The Rest
|Edging Higher Steadily|
|Global - Iron Ore Production|