JOHANNESBURG (miningweekly.com) - The latest report released by the United Nations Conference on Trade and Development (Unctad) on Friday found that world production of iron-ore fell by 6,2% in 2009 to 1,59-billion tons, while demand, driven by Asian giant China, increased.
The report, dubbed 'Iron-Ore Market 2009 to 2011', showed that output of the commodity decreased in most producing countries, except for the two southern cousins, South Africa and Australia.
China, which held the crown of being the world's largest producer of iron-ore for years, dropped to fourth place behind Australia, Brazil and India. Chinese production for 2009 amounted to 234-million tons, while Australia produced a whopping 394-million tons during the year.
Despite the gloom spread in the commodities market by the global recession, iron-ore trade climbed to a record level of 955-million tons in 2009, which was up 7,4% on that of the previous year.
The report found that the increase was mainly as a result of higher Chinese imports, driven by growing demand in the country, combined with a fall in Chinese domestic production.
"Chinese domestic production, which has contracted in recent years, is likely to fall further as a result of widespread mine closures," the study indicated.
Currently, China is by far the largest importer of iron-ore, accounting for two-thirds of world imports. Despite the recession, its intake of ore climbed by 41% in 2009, to 628-million tons.
Australia is the largest exporting country and sent 363-million tons of iron-ore overseas, which was a 17% increase from the previous year. Exports from Brazil decreased by 3% to 266-million tons and India exported 116-million tons.
Seaborne iron-ore trade was estimated to have increased by 11% in 2009, to 890-million tons.
The three largest iron-ore companies, Brazil-based Vale and UK-based Rio Tinto and Australia-headquartered BHP Billiton, together controlled 35% of total iron-ore production and 61% of total seaborne iron-ore trade in 2009, the survey showed.
It is anticipated that around 685-million tons of new production capacity may come on stream between 2010 and 2012. "Steel producers are increasingly investing in ‘captive mines' or mines they own themselves both for iron-ore and coal," the study said.
The report predicted that the world iron-ore market would be characterised by tight conditions over the short term, but that supply would gradually catch up with demand and that prices would decline from current levels, although they would stay higher than in the period before 2008.