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Markets
According to the Australian Bureau of Agricultural and Resource Economics (ABARE) the volume of Australian iron ore exports is forecast to grow by 23 per cent in 2008 to 329 million tonnes and by a further 15% to 377 million tonnes in 2009. The forecast increases in Australian exports in 2008 and 2009 reflect the start up of several iron ore projects.
Globally, iron ore production is forecast to grow by 13% in 2008 to 1.9 billion tonnes and a further 12% in 2009 to 2 billion tonnes. Most of this increase is expected to occur in China, Australia and Brazil.
Outlook for world iron ore trade
|
|
2006 |
2007 |
2008 (f) |
2009 (f) |
|
Iron ore imports (Mt) |
||||
|
European Union 27 |
170 |
172 |
173 |
176 |
|
Japan |
134 |
139 |
139 |
145 |
|
China |
326 |
384 |
445 |
489 |
|
Korea, Rep. of |
44 |
47 |
49 |
50 |
|
Chinese Taipei |
15 |
16 |
16 |
16 |
|
World Total Imports |
76 |
838 |
928 |
1002 |
|
Iron ore exports (Mt) |
||||
|
Australia |
247 |
267 |
329 |
377 |
|
Brazil |
247 |
269 |
306 |
346 |
|
India |
86 |
94 |
102 |
97 |
|
Canada |
28 |
28 |
29 |
29 |
|
South Africa |
27 |
32 |
36 |
39 |
|
Sweden |
18 |
20 |
22 |
24 |
|
World Total Exports |
765 |
838 |
928 |
1002 |
(f): ABARE forecast
In 2007-08, a 9.5% increase in iron ore contract prices and a 14% increase in volumes shipped are estimated to have led to iron ore export earnings totalling $20.3 billion, 31% higher than 2006-07. However, because of the late settlement of contract prices, trade data for the June quarter do not yet include a significant proportion of price increases. Consequently, the 2007-08 export earnings figure is an under-estimate and will be subject to substantial upward revisions in coming months.
For 2008-09, an average 85% rise in iron ore contract prices and a forecast 21% rise in export volumes are forecast to lift export earnings to around $39billion. This is an upward revision from ABARE’s June quarter forecasts mainly because of higher than expected price increases (ABARE’s earlier forecast was under the assumption of an average price rise of 80%). Export shipments have also been revised upward because of a faster than expected ramp up in production from Fortescue Metals.
Iron Ore Outlook
|
|
2006-07 |
2007-08 |
2008-09 (f) |
% change |
|
Production |
||||
|
Iron Ore (Mt) |
287.7 |
324.7 |
387.2 |
19.2 |
|
Exports |
||||
|
Iron Ore (Mt) |
257.4 |
293.8 |
354.6 |
20.7 |
|
Iron Ore Value (A$m) |
15512 |
20273 |
38711 |
90.9 |
(f)
ABARE forecast
(s)
ABARE estimate
Source: Australian Bureau of Agricultural and Resource Economics Australian Commodities Report, September Quarter 2008.