According to the Quarterly Resources and Energy report released by the Australian Bureau of Resources and Energy Economics (BREE) on December 12, Australia's iron ore exports in 2012 are forecast to increase by 10 percent year on year to 481 million mt, supported by capacity expansions at a number of projects owned by Australia's larger operators, including Rio Tinto and BHP Billiton. Exports in 2013 are forecast to increase further by 13 percent to 543 million mt.
Meanwhile, the outlook of the Australian steel commodity market shows that the iron ore spot prices for 62 percent iron ore content free on board (FOB) Australia averaged around US$105/mt in the third quarter of 2012. Spot prices in this quarter reached a low of around US$81/mt, the lowest level in real terms since late 2009. This substantial decrease in spot prices was a result of Chinese steelmakers running down inventories and also concerns over future growth in the Chinese steelmaking industry. Spot prices in the December quarter have since rebounded and have averaged around US$108/mt. For 2012 as a whole, contract prices are expected to average around US$128/mt, said BREE.
According to BREE, iron ore prices are forecast to decrease in 2013, averaging around US$106/mt. In the first half of the year, prices are expected to remain not far from current levels. Meanwhile, prices are forecast to increase in the fourth quarter of 2013 in line with an expected increase in steel consumption resulting from Chinese government infrastructure project and stimulus spending.