The scale of urbanisation and infrastructure build in developing regions would increase the world’s appetite for minerals, global management consulting firm McKinsey & Company global mining director Dr Sigurd Mareels predicted in 2011, adding that this demand growth, combined with supply constraints, had been pushing prices of most mineral commodities to historical high levels.
Mareels, who is based in Brussels, will once again deliver the outlook on iron-ore and metals at this year’s Investing in African Mining Indaba, in Cape Town.
Speaking recently at a geology conference at the University of Leuven, in Belgium, Mareels also predicted that the road ahead for the metals and mining industry in general remained very attractive, but that the industry would be characterised by higher volatility.
Mareels also told Asia Business in November 2011 that there was a “historical shortage” of mineworkers worldwide.Australia, the world’s largest source of iron-ore and the second-largest gold producer, needs an additional 86 000 workers by 2020, according to the Minerals Council of Australia.
In December last year, The Steel Index (TSI) reported that the most recent import figures from China Customs showed a sharp increase in iron-ore imports in November, rising 17% from October to reach 65.82-million tons – the highest level last year.
However, TSI noted that the level reached in October was typically low, owing to a week-long holiday in China that month.
China’s imports of Indian iron-ore reached a new low in November of just over 150 000 t. Simultaneously, provisional data from India’s Mines Ministry showed that iron-ore production in the country dropped by 19% in the first half of the fiscal year ending March 2013, owing to mining bans in key iron-ore-producing states.
Meanwhile, TSI also reported that the Federation of Indian Mining Industries had again called for a lowering of export duties from the then current level of 30% to 5%, which was the level at which levies on exported iron-ore fines had stood prior to December 2011.
Further, TSI stated that global crude steel production rose by 5.1% year-on-year in November last year, according to the latest report from the World Steel Association.
In China, output had increased by almost 14% in November last year, compared with the corresponding month in 2011. The association’s estimates for capacity use showed a decrease from 76.5% in October to 76.1%, but an increase of 1.6% from November 2011.
In its December quarter 2012 outlook report, Australia’s Bureau of Resources & Energy Economics (BREE) forecast that iron-ore prices would average $106/t free on board (FOB) in 2013, compared with a previous prediction of $101/t FOB in BREE’s September 2012 quarter report, compiled at a time of weak prices, which have since recovered, reported TSI.
TSI also outlined that supply was expected to remain tight in the run-up to the Chinese New Year in the first half of February, as mills looked to build inventory in advance of the holiday. Stocks of iron-ore at Chinese ports have dwindled to their lowest level since January 2011 and the first quarter is cyclone season in Australia and the rainy season in Brazil – China’s two largest suppliers.
Mareels is expected to focus on the supply, demand and outlook for iron-ore and metals in his address.