Iron Ore Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Iron Ore Category Overview

The global iron ore category is anticipated to grow at a CAGR of 3.89% from 2023 to 2030. Growth of the category can be attributed to increased demand from manufacturing, automotive, energy and construction sectors due to increasing urbanization, and robust economic growth in emerging markets. Iron ores extracted from mines are turned into pigments that are used to produce steel, which has wide range of end-use applications. Rising production of steel in developing economies, particularly in those of Asia Pacific, such as India, China, and Vietnam, is a crucial factor fuelling the demand for pellets, thus, supporting the growth for global category. However, factors such as stringent guidelines laid by the governments across the globe over mining operations and shortage of workforce may hinder the growth of global category.

Technologies that drive the global category include automation, digital twins, IoT (internet of things), automated drilling, 3D imaging, and autonomous haulage. Autonomous vehicles are increasingly used in mining operations, increasing the productivity. These vehicles are employed in dangerous settings with significant risks to human safety, such as underground mines and are equipped with cameras and tools that can be operated remotely, enabling users to watch and do tasks from a distance. In addition, technologies like digital twins support in the creation of virtual replicas of actual resources, workflows, and infrastructure, enabling mining operators to evaluate the maturity and capability of engineering data management to identify any gaps in data or monitoring. This allows them to focus their digitization efforts on the areas that will have the biggest impact and demand.

The category for iron ore is moderately fragmented and competitive, with major firms employing a range of tactics to increase their market share in this industry. One of the primary strategies used by the key players in this industry to benefit customers and increase market share is local manufacturing to reduce operational expenses. In addition, they are heavily investing in research and development to enhance their product line, supplementing their market share. Furthermore, the players are engaging in a range of strategic initiatives in order to expand their global presence, along with partnerships with other businesses, mergers & acquisitions, contractual agreements and new product launches. Key buyers in the category are steel manufacturers and iron smelters, who are usually big businesses with considerable financial clout. As a result, they have moderate negotiating and long-term contracting leverage with suppliers.

Labor cost, transportation, equipment, and warehouse costs are the major key cost components of this category. Players in the category, generally use a cost-plus pricing model wherein the total price is determined after adding a markup on labor and transportation. The prices of iron ore are influenced by several factors, with supply & demand being one of the major determinants. Growth of the global economy at any given time affect the demand for steel, thus impacting the demand for iron ore as well. In addition, prices of iron ore are also influenced by the sentiments of investors. They may buy more iron ore on futures contracts if they are more confident about future demand and pricing, which might raise the spot price globally. In September 2023, the average price of the commodity was over USD 120.8 per metric ton, which is over 21% higher than it was in September 2022.

Asia-Pacific region dominates the global iron ore category, holding 35% - 40% of global market share. China is the largest producer in the region, followed by Korea, India and Japan. The market is growing as a result of rising per capita disposable incomes, higher living standards, and an increase in commercial and residential buildings, especially in India and China, as well as the growing construction industry in emerging regional economies. The demand for iron ore is rising as a result of increased investment by the Indian government for infrastructure initiatives including expansion of ports, smart city projects and the green corridor. This will accelerate the economic expansion of the Asia-Pacific area. Furthermore, adopting a regional sourcing strategy to ensure lower transportation costs and having closer proximity to supplier facility, partnering with a supplier who is reputable for using cutting-edge analytical methods to estimate prices and demand with accuracy, evaluating pricing terms & conditions are some of the best sourcing practices considered in this category.

Iron Ore Procurement Intelligence Report Scope