Weaker demand expectations for iron ore are feeding into plans for the development of new capacity. After a decline in 2015, supply will sit flat in 2016, and data for future additional capacity shows that the iron ore project pipeline is drying up. Previous estimates for project deliveries for 2017–2019 of 136Mtpa were revised down to 62Mtpa in the latest estimate made in December 2015. In the short term, the supply-demand balance will be sensitive to the ramp-up of the new capacity.
AME’s dataset of iron ore projects in the development stage (including greenfield projects and brownfield expansions) includes an assessment of the likelihood of each project slated to come into production. Projects classified as “committed” are those already completed or waiting commissioning, or else are so far advanced that it would be uneconomic to discontinue development.
Projects classified as “probable” are assessed as very likely to come into production, but with less certainty than those in the “committed’ category. Projects in these two classifications are then combined with data from current producers to form AME’s Base Case of future supply.
Evolution of Future Capacity Estimates