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Iron Ore Global Supply and Consumption by Avyakt Agarwal

Iron ores are rocks and minerals from which metallic iron can be economically extracted. Iron ore serves as the primary raw material for steel production. Iron ore is abundant worldwide, with major reserves located in countries such as Australia, Brazil, China, India, and Russia

Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in colour from dark grey, bright yellow, or deep purple to rusty red. Iron ore is the primary source of  the world's iron and steel industries. It is therefore essential for the production of steel

Global supply

Iron ore serves as the primary raw material for steel production. Iron ore is abundant worldwide, with major reserves located in countries such as Australia, Brazil, China, India, and Russia. These nations account for the majority of global iron ore production, leveraging advanced mining technologies to extract and process vast quantities of ore. The iron ore supply chain involves complex logistics, including mining, beneficiation, transportation, and export, to meet the needs of steelmakers around the world. Market dynamics, geopolitical factors, and environmental regulations influence the global iron ore trade, shaping production patterns and pricing. Collaborative efforts among stakeholders, including mining companies, governments, and international organisations, are essential for ensuring a sustainable and resilient global supply of iron ore to support the steel industry's growth and development.

Mining of Iron ore

The mining of Iron ore involves a systematic process beginning with exploration and resource assessment. Geologists employ various techniques to identify viable ore deposits, assessing their size, quality, and location. Upon discovery, mine planning and development ensue, including the design of mine layouts and infrastructure. Drilling and blasting techniques are commonly used in open-pit mines to extract ore from the earth's surface. Drill rigs bore holes into the rock, into which explosives are inserted to break up the material. In underground mining, tunnelling methods are utilised to access deeper ore deposits. Once extracted, the ore undergoes crushing, grinding, and benefaction processes to separate the valuable minerals from the waste rock. The resulting concentrate is then transported to steel plants to become a finished product. Australia is the largest producer of iron ore in the world with 900 million tonnes per year. The Mount whaleback mine in Australia produces over 88million metric tons of iron ore. Brazil is the world's second-largest iron ore producer. In 2023, the iron ore mine production output in Brazil was 440 million tonnes. The Serra Norte Mining Complex is the world’s largest iron ore mines in Brazil and produces 109 million tonnes per year. More than 90% of India's overall iron ore shipments go to neighbouring China

Types of iron ore

There are two types of iron ore magnetite and hematite. Magnetite (Fe3O4) with iron content of 72 percent, while hematite (Fe2O3) has an iron content of 70 percent and is widely used and common to find. The majority of the iron ore found in India is Haematite. Magnetite typically appears black or dark brown with a metallic lustre, contrasting with hematite's variable colour range from black to reddish-brown, often exhibiting a reddish streak. Magnetite is strongly magnetic, whereas hematite is non-magnetic. Magnetite is used in numerous industrial applications such as water filtration systems, magnetic recording and medical equipment. Hematite is a cheaper alternative for steel production compared to Magnetite and has been extensively mined since the Bronze Age


Quality of iron ore:-

The quality of iron ore plays a pivotal role in the efficiency, cost-effectiveness, and sustainability of iron and steel production. High-quality iron ore, characterized by high iron content and low impurity levels, is essential for ensuring the smooth operation of ironmaking and steelmaking processes. Superior ore quality leads to higher productivity, lower energy consumption, reduced emissions, and improved product quality in the steel industry. It enables manufacturers to produce high-grade steel products with desirable properties. Therefore to judge the quality of iron we judge it by how much iron is there in 100 grams, like fe 64 means 64 grams of iron per 100 grams (Fe refers to the percentage of iron content in the iron ore )

In steelmaking, iron ore with a high iron content, typically above 62%, is preferred. Therefore, iron ore with an iron content of around 62% Fe or higher is typically used to make steel. Higher iron content in the ore results in more efficient steel production processes, lower energy consumption, and higher-quality steel products. However, the specific iron content required may vary depending on the steelmaking process and the desired properties of the final steel product. Majority (over 85%) of the hematite ore reserves are of midgrade (+62% Fe) in India.

Though Australia leads in the quantity of iron Ore mined, Brazil dominates the quality game. Carajas Mine Complex owned by Vale provides Iron ore containing around 66%Fe (Iron). The Australian mines provide iron ore with Fe around 62%. India only exports low grade iron which is not used in the country.*

Iron Ore Being Converted to Steel

Global Consumption

The consumption of iron ore is fundamental to various industries and sectors worldwide, serving as a cornerstone material in modern civilization. Iron finds extensive utilization across a spectrum of applications, spanning construction, manufacturing, transportation, and infrastructure development. In construction, iron is employed for its structural integrity in the form of reinforcing bars and frameworks, providing essential support and stability to buildings, bridges, and other infrastructure projects. In manufacturing, iron serves as a foundational material for the production of machinery, equipment, and tools, facilitating industrial processes across diverse sectors. Transportation relies heavily on iron ore-derived steel, forming the core of automobiles, ships, railways, and aerospace structures due to its strength, safety, and relatively light weight. Due to global population growth, urbanization, and industrialization the demand for steel, iron ore is expected to increase.

Pricing of iron ore

The pricing of iron ore, a crucial commodity in global industrial processes, is influenced by a myriad of factors ranging from supply and demand dynamics to geopolitical tensions and economic policies. Historically, iron ore pricing has been volatile, responding sharply to fluctuations in demand from major steel-producing countries like China and changes in supply due to disruptions in major mining regions such as Australia and Brazil. Additionally, shifts in environmental regulations and technological advancements in mining and processing also play a significant role in shaping iron ore prices. With its pivotal role in steel production, the pricing of iron ore carries implications not only for mining companies and steel producers but also for a wide array of industries dependent on steel products, making it a focal point of analysis for economists and policymakers alike.

(Fe 62-64)

How do steel prices affect the world

Fluctuations in steel prices can ripple through an economy, impacting various sectors and key economic indicators. Firstly, steel prices influence the construction industry, a major consumer of steel, affecting the cost of infrastructure projects and residential/commercial developments. Higher steel prices can inflate construction costs, potentially leading to reduced investment in real estate and infrastructure, thereby impacting economic growth and GDP. If the steel prices rise India, then building houses, construction will become expensive Additionally, steel is a significant component of international trade, with many countries both importing and exporting steel. When steel prices rise, it can affect a country's trade balance, as higher import costs may lead to increased trade deficits. Conversely, steel-exporting nations may experience enhanced export revenues during periods of elevated steel prices. Such shifts can influence a country's overall balance of payments and international competitiveness. Furthermore, fluctuations in steel prices can have cascading effects on related industries, such as manufacturing, transportation, and energy, which are vital contributors to GDP. Therefore, the volatility of steel prices can reverberate throughout the economy, impacting GDP growth, trade dynamics.


Large Companies

· Australia being the largest producer of iron ore has a 37.6 contribution to the total iron produced in the world.

· Brazil is the second largest with the world’s largest mines The Serra Norte Mining Complex

· The China Bouwa Steel group is the largest steel factory and consumes over 900 million tonnes of steel.

· Arcelor Mittal is the second largest steel company in the world`2 with a revenue of 68 billion dollars

· India’s largest steel company is jsw steel which produces over 28 million metric tons.

· Baildadila Iron ore mines is India’s largest iron ore mines (owned by NMDC) followed by rungta steel


Maqro: -

*Indian bureau of Mines


Nasdaq: -$150-in-2024-on-chinese-stimulus-analysts-say

Global steel:-

Vedantu: -


Statista:- - :~:text=Largest steel producers worldwide based on production volume 2022&text=In 2022, China's Baowu Group,was second in the ranking.

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