Fitch: Global iron ore production will increase in 2022-2026

International rating agency Fitch Ratings predicts accelerated growth of iron ore production in 2022-2026, the report of the agency reads, according to Mining.com.

“Global iron ore production growth will accelerate in the coming years, bringing an end to the stagnation that has persisted since iron ore prices hit a decade-low average of $55 a tonne in 2015 t,” market analyst Fitch Solutions asserts in its latest industry report.

World iron ore production will increase by an average of 2.7% in 2022-2026 compared to a decrease of 1.3% in 2017-2021. According to this scenario world production of iron ore will increase by 361.7 million tons in 2026.

The main growth factors will be the slow growth of production in Australia, the rapid increase in production in Brazil and its stabilization in China.

China will increase investment in foreign assets to improve the security of imported ore supplies, and Guinea will be an important beneficiary of this trend through the Simandou project.

The growth of supply will be provided primarily by Brazil and Australia. Local companies have strong plans to expand capacity and invest in additional production.

In China, raw material production will grow again in the next 3-4 years, as the country works to increase its self-sufficiency and reduce imports from Australia. As Chinese mines have a high cost of the final product, the investment will be directed to the development of foreign assets.

“Looking ahead, we expect lower prices to eventually slow production. The annual growth of iron ore production will decrease by an average of 1.1% in the period from 2026 to 2030. By the end of the decade, production levels will not change,” the agency said.

Earlier GMK Center reported that Fitch Ratings raised the short-term valuation of iron ore, nickel, zinc and coking coal. According to the agency’s forecasts, in 2022 iron ore prices will reach $120/t, and in 2023 – will drop to $85/t.