March 2021
BWC20298

177
global iron ore pellets market
GlobalIron Ore Pellets
Market- Industry Trends & Forecast Report 2027
The global iron ore pellets market is growing
Year-over-Year (YoY) and has reached USD 48.13 billion in 2020. The market is
further expected to touch USD 62.13 billion by 2027, at a CAGR of 3.37% during
2021-2027 (forecast period). The iron ore pellets market is likely to grow during
the forecast timeframe due to expanding steel production in developing
economies of the Asia-Pacific, such as India, China, and Vietnam.
Iron ore pellets are spherical balls that are used in steel manufacturing. The iron ore pellets manufacture ultra-fine-particles with a diameter of 9 to 16 mm, which improves the overall performance of steel plants. Its consumption is majorly driven by the rising demand for steel from end-users including, automotive, manufacturing, and construction industry among others.
Source: BlueWeave Consulting
Global Iron Ore Pellets
Overview
Iron ore pellets are small balls of iron ore used in
the production of steel. They are manufactured using technology that makes use
of the waste powder produced during the ore extraction process. To make ore pellets,
first iron ore is crushed and ground to remove impurities. The resultant ore is
mixed with a binding agent and then heated to create durable, marble-sized
pellets. These pellets are then used for manufacturing steel for the construction
of bridges, cars, planes, bicycles, household appliances, and much more. As
compared to other types of iron ore, pellets are the best components for
manufacturing iron due to their advantages, such as uniform size, high
metallization rate, and enhanced permeability in blast furnaces to optimize
fuel consumption rate, among others.
Global Iron Ore Pellets
Market Trends
Growth Drivers
Limited Availability of
High-Grade Lump
Mined iron ore comes in varying sizes, the largest of
which is more than 1 meter (40 inches) across, and the smallest of which is
about 1 millimeter (0.04 inch). Steel is made from around two billion tonnes of
iron ore (average 62%) in the form of lumps, sinter, and pellets around the
world. Previously, lump ores were the main source of iron in the manufacturing
process. However, due to extensive mining activities by multiple firms,
high-grade lump ore reserves have been steadily depleting over time. This
limited availability of high-grade lump ore is becoming a cause of concern for
the iron & steel industry as it is becoming increasingly difficult to find
suitable lump ore for direct use in blast furnaces. Shortage of high-grade iron
ore lumps is a major driver of iron ore pellet sales.
Furthermore, the sintering process produces more waste
than the pelletizing process, which is why major steel producers tend to use
iron ore pellets as blast furnace feed over lump ore. These are the key factors
driving the growth of the market. Iron and steel manufacturing is among the
most energy-intensive industries accounting for the largest share, about 27
percent, of global carbon dioxide (CO2) and other toxic emissions from the
manufacturing sector.
Environmental Benefits
Iron Ore pellet usage gradually reduces carbon dioxide
and other poisonous gas emissions such as sulfur oxides, nitrogen oxides, and carbon
monoxide particulate matter, thereby, saving the environment. It also cuts down the
expenditure on waste gas treatment, flue gas desulfurization (FGD), scrubbers,
and others. Additionally, the pelletizing process decreases the emission rate
of Carbon Dioxide (CO2) by 85%, Sulfur Oxides(SOx) by 90%, and Nitrogen Oxides
(NOx) by 20% as compared to sintering, thus, leaving a light overall ecological
footprint. Environmental concerns have resulted in
profound regulatory scrutiny for highly polluting industries, including power,
iron, and steel, among others.
Restraints
The Fluctuations in the
Prices of Raw Material
The fluctuations in
the prices of raw materials are hampering the growth of the global iron ore
pellets market. Fluctuating raw material costs and inadequate price control can negatively impact a company's performance. The cost of raw materials remains the
top overall business concern among industries and manufacturers. With regard to
the extreme price volatility of raw materials, it becomes a real challenge for
manufactures to remain competitive and assure sustainable margins. Chemicals
and manufacturing industries are highly affected when prices of raw material
fluctuate, which in turn influence the bottom line results of companies, besides hindering the market growth.
Impact of COVID-19
The
coronavirus-induced pandemic has severely affected the global economy besides
affecting business operations. Due to the high infection rates and adverse
impact on public health systems, various countries had to enforce nationwide
lockdowns which had a major impact on industrial supply chains, trade, and
related services.
COVID-19
has had a major impact on the global iron ore pellets market as it stalled the development
of several industries, including the construction industry, as well as the steel
manufacturing industry that uses iron ore pellets. Additionally, nationwide
lockdowns had a negative impact on the construction sector, supply chain, raw material
manufacturers, mining companies, and logistics sector, which in turn stifled the
growth of the iron ore pellets market. Additionally, production, operation, and
infrastructural development activities have decelerated owing to the spread of
coronavirus, which is further anticipated to impact the demand. Additionally,
the Asia-Pacific is expected to be severely impacted by the spread of COVID-19 owing
to the pandemic’s impact on China, Japan, and India.
Global Iron Ore Pellets Market: By Grade
Based on the grade, the global iron ore
pellets market is segmented blast furnace and direct reduced. The Direct
Reduced (DR Reduced) segment accounted for the largest share in the market in
2020 and is likely to dominate over the forecast period as well. This growth is
attributed to product benefits including, lower carbon emission, improvement in
space utilization of steel plant, and elimination of sintering process. In
2020, all steel produced in the U.S. was produced in an electric arc furnace
using DR-grade pellets.
Global Iron Ore Pellets Market: By Trade
Based on trades, the global iron ore pellets market is grouped into captive and seaborne. Captive holds the largest share in the marking as most of the supply of iron ore pellets are consumed in-house or exported for steel production to local customers.Most of the major steel companies across the globe that account for a major share in global steel production source their iron ore pellet requirements through their manufacturing firms.
Source:
BlueWeave Consulting
Global Iron Ore Pellets
Market: Regional Insights
Geographically, the iron ore pellets market is categorized into North America, Europe, the Asia-Pacific, the Middle East & Africa, and Latin America. The Asia-Pacific has the largest share in the global market owing to China’s growing steel output, which is a key parameter supporting regional demand. Additionally, major countries are experiencing significant growth across end-user industries. Emerging nations such as India have announced to invest in green steel technology to reduce the waste generated during the manufacturing stage. Such trends will positively influence regional growth from 2021 to 2027.
Competitive Landscape
The key players in this market are Rio Tinto Ltd., BMP
Group Ltd., Fortescue Metals Group Ltd., Hancock Prospecting Pty Ltd., Vale
S.A., Cleveland-Cliffs Inc., United States Steel Corporation, ArcelorMittal
S.A., LKAB Koncernkontor, National Mineral Development Corporation, and other
prominent players. Key market players are entering into collaborations and
engaging in mergers & acquisitions of companies to capture a greater market
share. Furthermore, the market participants are focusing on improving their
product quality to attain a competitive edge over other players.
Recent Development
·
In
February 2021, Rio Tinto invested USD 105 billion to upgrade its Port-Alfred
Port Facilities in Saguenay, Quebec, Canada. The investment aims at improving
the safety and efficiency of receiving and unloading operations for raw
materials used in manufacturing aluminum at Rio Tinto's operations in the
region.
·
In
January 2021, Vale restarted its production at the pelletizing plant in Vargem
Grande, Nova Lima (MG), which was halted since February 2019. With a nominal
capacity of 7 million tons per year (MTPY), the plant is projected to generate approximately
4-5 Mtpy in 2021.
Scope
of the Report
Attribute |
Details |
Years Considered |
Historical data – 2017-2020 Base Year – 2020 |
Facts Covered |
Revenue in USD Billion |
Market Coverage |
U.S, Canada, Germany, UK, France, Italy, Spain, Brazil, Mexico, Japan,
South Korea, China, India, Argentina, UAE, South Africa, Saudi Arabia |
Product/Service Segmentation |
By grade, trade, and
region |
Key Players |
Key Players for Market Includes:Rio Tinto
Ltd., BMP Group Ltd., Fortescue Metals Group Ltd., Hancock Prospecting Pty
Ltd., Vale S.A., Cleveland-Cliffs Inc., United States Steel Corporation,
ArcelorMittal S.A., LKAB Koncernkontor, National Mineral Development Corporation,
and other prominent players |
By Grade
Ø Blast Furnace (BF)
Ø Direct Reduced (DR)
By Trade
Ø Captive
Ø Seaborne
By Region
Ø North America
Ø The Asia-Pacific
Ø The Middle East & Africa
Ø Latin America
Ø Europe
FAQ’s
1. What is the current size of the global iron ore
pellets market?
Answer: The global iron ore
pellets market has reached USD 48.13 billion in 2020.
2.
What are the major factors
driving the growth of the global iron ore pellets market?
Answer: The major factors driving the growth of the
global iron ore pellets market are the limited availability of high-grade lumps and
environmental benefits.
3. Who are the key players in the global iron ore pellets
market?
Answer: The key players in the global iron ore
pellets market include Rio Tinto Ltd., BMP Group Ltd., Fortescue Metals Group
Ltd., Hancock Prospecting Pty Ltd., Vale S.A., Cleveland-Cliffs Inc., United
States Steel Corporation, ArcelorMittal S.A., LKAB Koncernkontor, National
Mineral Development Corporation, and other prominent players.
4.
Which grade accounted for
the largest share in the global iron ore pellets market?
Answer: Direct grade account
for the largest share in the global iron ore pellets market.
5. Which region growing at a higher rate in the global iron
ore pellets market?
Answer: The Asia-Pacific is
growing at a higher rate in the global iron ore pellets market.
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