Just keep digging: Weakened demand from emerging economies will hamper the price of iron ore

The Iron Ore Mining industry's financial performance has been extremely volatile in recent years, despite steady production levels. Over the five years to 2017, the industry has experienced revenue spikes and declines, largely due to substantial fluctuations in the world price of iron ore. Over the next five years, the world price of iron ore is expected to remain volatile. Industry revenue is expected to remain constrained despite operators in the industry continuing to become leaner and more cost efficient by shedding noncore assets as well as increasing operational efficiency. With production levels in Australia and China planned to gradually increase, industry revenue will continue to be negatively affected...read more.

Industry Statistics & Market Size
Revenue
$4bn
Annual Growth 12-17
-11.0%
Forecast Growth 17-22
Profit
Employment
4,820
Businesses
23
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Industry Threats & Opportunities

  • Industry revenue is expected to remain constrained despite operators becoming leaner and more cost efficient
  • The strength of the US dollar during the period has constrained export growth
  • Ever-changing regulations in emerging economies have made it hard to gauge prices
  • Industry Report - Industry Analysis Chapter

    The US mining sector is highly volatile, affected greatly by business cycles, iron ore prices and international downstream demand for steel. Over the five years to 2017, the world price of iron ore fluctuated substantially. Chinese industrialization led to a construction boom and subsequently high demand for steel, leading iron ore prices to skyrocket to near record highs until 2012. Conversely, the recent slowdown of the Chinese economy has slowed demand for industry products, causing the world iron ore price to crash to less than half of peak prices over the past year. Industry output has consistently declined over the period, and was reaching 40.8 million metric tons in 2016 (latest data available), further exacerbating industry revenue. Average Iron ore prices fell 42.4% i...purchase to read more.

    Additional Insights for the Iron Ore Mining Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Iron Ore Mining Industry are

  • Effective cost controls
  • Ability to comply with environmental laws
  • Availability of resource
  • IBISWorld analysts also discuss how external factors such as Demand from iron and steel manufacturing and World price of iron ore in the Iron Ore Mining industry impact industry performance..

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    What is the Iron Ore Mining Industry?

    Companies in this industry mine iron-bearing ores. In addition to ore extraction, mining includes the development of mine sites and the processing of ore into a concentrated or pellet form. Iron ore and iron ore pellets are then sold as an input for blast-furnace steel production (see the Iron and Steel Manufacturing industry, IBISWorld report 33111).

    Industry Products
  • Iron ore pellets
  • Other products
  • Industry Activities
  • Iron ore mining
  • Iron ore beneficiating
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from iron and steel manufacturing
  • World price of iron ore
  • Industrial production index
  • Trade-weighted index

  • Current Performance
  • Volatile prices
  • Trade
  • Operational trends
  • Chart: Revenue Growth

  • Industry Outlook
  • Production, prices and profit
  • Foreign markets
  • Market entry will remain challenging
  • Table: Iron Ore Mining Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Iron Ore Mining Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Paint Manufacturing
  • Cement Manufacturing
  • Iron & Steel Manufacturing
  • Nonferrous Metal Refining
  • Nonferrous Metal Rolling & Alloying

  • Key Selling Industries
  • Coal & Natural Gas Power
  • Hydroelectric Power
  • Inland Water Transportation
  • Mining, Oil & Gas Machinery Manufacturing
  • Nuclear Power
  • Petroleum Refining
  • Sand & Gravel Mining

  • Products & Services
  • Iron ore pellets
  • Other products
  • Chart: Iron Ore Mining Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Steel manufacturers
  • Exports
  • Other industrial markets
  • Chart: Major Market Segmentation for the Iron Ore Mining Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitWagesPurchasesRent and utilitiesDepreciation and other costs
  • Chart: Cost Structure Benchmarking – Sector vs Iron Ore Mining

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Iron Ore Mining Industry

  • Industry Globalization
    Cliffs Natural Resources Inc.United States Steel Corp.ArcelorMittal S.A.
  • Table: Cliffs Natural Resources Inc. - financial performance
  • Table: United States Steel Corp. - financial performance
  • Table: ArcelorMittal S.A. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Iron Ore Mining Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Iron Ore Mining Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Exports (2008-2022)
  • Imports (2008-2022)
  • Wages (2008-2022)
  • Price of Iron Ore (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Beneficiation
  • A variety of processes whereby ore extracted through mining is separated into mineral and gangue, the former suitable for further processing or direct use.
  • Iron Ore Pellets
  • Marble-sized balls of an iron ore and clay mixture, baked in a large furnace.
  • Pelletizing
  • The process of compressing or molding a material into the shape of a pellet.
  • Taconite
  • An iron-bearing, high-silica, flint-like rock. It typically contains between 20.0 and 30.0% iron and occurs in the Mesabi Range of northeastern Minnesota.
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    This report on Iron Ore Mining:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Iron Ore Mining market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

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