Iron Ore Pellets Market 2020 and Forecast 2021-2027

                                          
Report Overview: Global Iron Ore Pellets Market


The global iron ore pellets market size was valued at USD 36.52 billion in 2020 and looks set to grow at a compound annual growth rate (CAGR) of 2.6% from 2021 to 2027. Expanding steel production in developing economies of Asia Pacific, such as India, China, and Vietnam, is a crucial factor expected to fuel market growth over the coming years. Iron ore pellets are spherical balls of iron ore that are used in steel manufacturing. The lockdown imposed across several countries across the globe due to the COVID-19 pandemic at the end of 2019 has halted the manufacturing activities, thereby severely affecting the iron pellet demand in the first half of 2020. However, according to several economic analysts, the global economy is likely to witness a big rebound from 2021, which is likely to spur the iron ore pellets industry growth in the near future.


In 2018, demand for iron ore pellets in the U.S. benefitted from improved steel production that was driven by strong economic growth, high government-led fiscal stimulus, and strong business confidence. In 2019, demand for iron ore pellets in the country witnessed moderate growth due to steady growth in steel production.

The primary end-use industries of steel include construction and automotive industries. These industries play a major role in indirectly shaping the iron ore pellet demand as it is one of the primary raw materials used for steel manufacturing. Until 2020, the global construction sector witnessed strong growth that resulted in rising crude steel production, especially in China and other Asian countries, like India.

In the first half of 2020, due to the COVID-19 pandemic, government imposed restrictions in most of the construction activities severely hindered the steel production. However, according to the World Steel Association, the construction sector is likely to gain a major boost in the second half of 2020 in various regions due to government stimulus plans. Moreover, the focus of the governments and international institutions is gradually moving from emergency liquidity provision to economic recovery and support for production, infrastructure, and industry.

Product Insights: Global Iron Ore Pellets Market

Blast furnace (BF) pellets lead the market for iron ore pellets in 2019 with a revenue share of 54.4% in 2019. It is a lower grade product when compared to iron pellets used in Direct Reduced (DR) method, and therefore has a lower cost compared to its counterpart. Blast furnace method is usually found in integrated steel plants. Lower cost of these iron ore pellets, coupled with the abundance of integrated steel plants found in developed economies, is the primary factor boosting the growth of the BF segment.

The direct reduced segment is predicted to exhibit the highest CAGR of 2.7% in terms of revenue from 2020 to 2027 owing to its rising demand in emerging economies of Asia Pacific. The operating costs as well as initial capital investments for direct reduction plants are lower than integrated steel plants, and therefore these plants are becoming more popular in developing economies, like India.

Trade Insights: Global Iron Ore Pellets Market

The captive segment lead the market for iron ore pellets in 2019 with a volume share of 70.8% in 2019. This illustrates that most of the iron ore pellet production is consumed in-house or shipped to nearby customers for steel manufacturing. Most of the major steel companies across the globe such as ArcelorMittal, who account for a major share in global steel production, source their iron ore pellet requirements through their own manufacturing firms.
Seaborne trade is predicted to expand at the fastest CAGR of 4.0% in terms of revenue from 2020 to 2027. This significant growth can be attributed to the increasing demand for iron ore pellets from non-integrated steel manufacturing companies. Trading prices of iron ore pellets in different regions play an critical role in determining the size of seaborne trade.


Regional Insights: Global Iron Ore Pellets Market

Asia Pacific lead the market for iron ore pellets with a volume share of 52.3% in 2019 and is anticipated to witness the fastest growth over the forecast period 2021-2027. This is attributed to a large steel manufacturing base of China. According to the World Steel Association, China alone produced approximately 53.3% of the global crude steel in 2019. Moreover, quick and effective recovery of China from the COVID-19 pandemic in 2020 is likely to benefit the market growth in the country as various parts in China have already begun their manufacturing activities.
North America witnessed healthy growth until 2019. However, the year 2020 which was already predicted to witness slower growth in steel manufacturing even before the COVID-19 pandemic due to weakened construction and manufacturing sector is likely to witness sharp decline. However, initiatives such as the USD 2 trillion fiscal stimulus package by the U.S. government are expected to accelerate the country’s economic recovery, thereby facilitating market growth.

Europe held the second largest market share in 2019. In the long term, after the recovery from COVID-19 pandemic, the domestic demand for iron ore pellets in Europe is likely to be influenced by improving steel production in the region, which, in turn, is predicted to be majorly driven by recovery of the construction sector and healthy demand from the automotive industry. In short term, the COVID-19 pandemic is expected to cause a severe impact on the demand for iron ore pellets due to a halt in steel production.

Middle East and Africa are expected to expand at a healthy CAGR from 2020 to 2027. Rise in economic diversification programs in Middle East and Africa to reduce their dependence on the oil and gas sector and boost their manufacturing sector is expected to drive steel production in the region over the coming years. This is likely to spur the demand for iron ore pellets in the region.

Key Companies & Market Share Insights: Global Iron Ore Pellets Market

The market has been characterized by intense competition with some of the major industry players holding a considerable share. Vale and Rio Tinto are among the largest producers of iron ore pellets in the world. The majority of Vale’s iron ore mines are concentrated in Brazil and China. The market for iron ore pellets is largely dictated by multinational players who own established iron ore mines and processing facilities, thereby making entry of new players difficult. Major players focus on long term agreements with steel producers and compete majorly on price and quality. Some of the prominent players in the iron ore pellets market include:

Key companies Profiled: Global Iron Ore Pellets Market Report

 	
Vale
 	
Rio Tinto
 	
Cleveland-Cliffs
 	
BHP Billiton
 	
US Steel
 	
Fortescue Metals
 	
ArcelorMittal
 	
Bahrain Steel
 	
LKAB
 	
NMDC Limited

This report forecasts revenue and volume growth at the global, regional, and country levels, and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Trusted Business Insights has segmented the global iron ore pellets market report on the basis of product, trade, and region:

Product Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

Blast Furnace (BF) Iron Ore Pellet

Direct Reduced (DR) Iron Ore Pellet

Trade Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

Captive

Seaborne

Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

North America

The U.S.

Canada

Mexico

Europe

Germany

Russia

Asia Pacific

China

India

Japan

Central & South America

Brazil

Middle East & Africa

Iran

Frequently Asked Questions About This Report

How big is the iron ore pellets market?

b. The global iron ore pellets market size was estimated at USD 47.6 billion in 2020 and is expected to reach USD 45.1 billion in 2020.

What is the iron ore pellets market growth?

b. The global iron ore pellets market is expected to grow at a compound annual growth rate of 3.7% from 2020 to 2027 to reach USD 63.5 billion by 2027.

Which segment accounted for the largest iron ore pellets market share?

b. Asia Pacific lead the iron ore pellets market with a share of 48.2% in 2019. This is attributable to to large steel manufacturing base of China.

Who are the key players in iron ore pellets market?

b. Some key players operating in the iron ore pellets market include Vale, Cleveland-Cliffs, ArcelorMittal, Rio Tinto, and BHP Billiton. Vale and Rio Tinto.

What are the factors driving the iron ore pellets market?

b. Key factors that are driving the market growth include the expanding steel production in developing economies of Asia Pacific such as India, China, and Vietnam.

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