Iron Ore Pellets Market Size, Share & Trends Report

Iron Ore Pellets Market Size, Share & Trends Analysis Report By Product (Blast Furnace, Direct Reduced), By Trade (Captive, Seaborne), By Region, And Segment Forecasts, 2020 - 2027

  • Published Date: Jun, 2020
  • Base Year for Estimate: 2019
  • Report ID: GVR-4-68038-594-6
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 130

Report Overview

The global iron ore pellets market size was valued at USD 47.63 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 3.7% from 2020 to 2027. Expanding steel production in developing economies of Asia Pacific, such as India, China, and Vietnam, is a crucial factor expected to fuel the 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 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.

U.S. iron ore pellets market size

In 2018, demand for iron ore pellets in 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 a 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 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, 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

Blast furnace (BF) pellets dominated 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 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 3.8% 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

The captive segment dominated 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 increasing demand for iron ore pellets from non-integrated steel manufacturing companies. Trading prices of iron ore pellets in different regions play an important role in determining the size of seaborne trade.

Global iron ore pellets market share

Regional Insights

Asia Pacific dominated 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. 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 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 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, COVID-19 pandemic is expected to cause a severe impact on the demand for iron ore pellets due to halt in steel production.

Middle East and Africa is 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 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

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:

  • Vale

  • Rio Tinto

  • Cleveland-Cliffs

  • BHP Billiton

  • US Steel

  • Fortescue Metals

  • ArcelorMittal

  • Bahrain Steel

  • LKAB

  • NMDC Limited

Iron Ore Pellets Market Report Scope

Report Attribute

Details

Market size value in 2020

USD 45.2 billion

Revenue forecast in 2027

USD 63.5 billion

Growth Rate

CAGR of 3.7% from 2020 to 2027

Market demand in 2020

398,823.0 kilotons

Volume Forecast in 2027

539,164.0 kilotons

Growth Rate

CAGR of 3.0% from 2020 to 2027

Base year for estimation

2019

Historical data

2016 - 2018

Forecast period

2020 - 2027

Quantitative units

Volume in kilotons, Revenue in USD million, CAGR from 2020 to 2027

Report coverage

Volume and revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Product, trade, region

Regional scope

North America; Europe; Asia Pacific; Central & South America; MEA

Country scope

U.S.; Canada; Mexico; Germany; Russia; China; India; Japan; Brazil; Iran

Key companies profiled

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

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Segments Covered in the Report

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, Grand View Research 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

      • U.S.

      • Canada

      • Mexico

    • Europe

      • Germany

      • Russia

    • Asia Pacific

      • China

      • India

      • Japan

    • Central & South America

      • Brazil

    • Middle East & Africa

      • Iran

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