World steel production and consumption are expected to increase by 3pc and 3.6pc in 2021 from last year, according to the Resources and Energy Quarterly report published by the Australian government’s Office of the Chief Economist. However, this growth rate is expected to soften in the coming years.
Australia’s iron ore exports are forecast to increase to 1.1bn mt over the next five years from 900mn mt shipped by the end of the country’s financial year (June 30, 2020). The exports are predicted to be worth A$136mn ($103mn) in FY2021 and above A$100mn annually for the next five years.
Iron ore prices are expected to remain above the $100/mt mark until late 2021 due to supply disruptions in Brazil and high demand from China. However, the Chief Economist expects prices to ease over the subsequent years to $72/mt by 2026.
The Australian premium for hard coking coal is expected to rise to $166/mt over the next five years from the current $133/mt as steelmaking grows around the world. Australia metallurgical coal exports are predicted to rise to 168mn mt by 2026 compared with 168mn mt shipped in FY 2020.