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The 7th Annual Americas Iron Ore conference that took place in Rio in early November opened with the recognition from the industry and its players that a “new era” for iron ore has begun. After the extraordinary 2010 high prices, the industry is now entering a new period of more subdued prices on the back of excess supply and slowing demand from China, with ‘lower prices remaining for longer’ according to BMO Capital Markets’ Jessica Fung. This view is shared by Laura Brooks from CRU who suggests that the combined growth from Australia (Roy Hill adding 55mt) and Brazil (Anglo’s Minas Rio) is set to persist in 2015.
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The new paradigm shift described by Renato Matos from Vale comes with challenges that have to be considered, including the deterioration of the ore quality. Project developments and future supply in the Region (Latin Resources, Atlantica Mining, SAFM) and in other part of the world (ArcelorMittal) have been reviewed during the program of the conference, however, according to Wood Mackenzie Paul Gray, mine depletion and demand growth outside China implies a theoretical supply-gap after 2020.
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As Rodrigo Franklin from Samarco positively remarks, the world is still growing and steel is needed. Urbanisation is still happening even if at a slower pace, and this is what is underpinning Samarco’s growth that in 2015 plans to reach 30 mtpa.
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So, what next for the iron ore industry? How to navigate the wave of supply? Has China hit a wall? What does the industry need to get back to creating value? Who will be funding the next generation of mines?
The presentations from the conference, now available on Slideshare, provide some answers to tackle the current challenging times and we invite you to participate in the discussion.