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Iron Ore Pellets Market Growth & Trends
The global iron ore pellets market size is expected to reach USD 63.52 billion by 2027, expanding at a CAGR of 3.7% from 2020 to 2027, according to a new report by Grand View Research, Inc. The product demand is predicted to be largely driven by rising steel production in Asia Pacific.
Iron ore pellets are an important source for steel manufacturing. Rapid industrialization and urbanization in emerging economies of Asia Pacific since the past few years have stimulated the production of steel. This has caused a surge in demand for iron ore pellets in the region.
The product is mainly used in captive form by large integrated steel producers. However, there is ample potential for seaborne trade of the product as cross country trade is expected to rise over the coming years owing to rising demand from Asia Pacific and Middle East and Africa.
China dominates the market owing to huge steel production capacity in the country. However, emerging economies such as India, Vietnam, Myanmar, Philippines, and Indonesia are expected to witness significant growth as these countries are posing a significant challenge to the Chinese steel producers owing to their comparatively lower labor costs and supportive government policies.
Major players in the industry include multinational companies such as Vale, Rio Tinto, and BHP Billiton. Rio Tinto surpassed Vale as the leading global supplier of iron ore as well as its pellets in the first quarter of the year 2020 as Vale witnessed a sharp decline in iron ore output due to a deadly dam burst owned by Vale in 2019.
Iron Ore Pellets Market Report Highlights
- Asia Pacific acquired the largest volume share of 52.3% in 2019. This can be attributed to a large steel production base in China
- By product, direct reduced pellet is anticipated to exhibit the fastest CAGR of 3.8% from 2020 to 2027 in terms of revenue owing to rising penetration of direct reduction production method
- Based on trade, the captive segment dominated the market with a volume share of 70.8% in 2019 owing to a large number of integrated steel plants across the globe
- Middle East and Africa is expected to expand at a significant CAGR of 3.1% from 2020 to 2027 in terms of revenue owing to several economic diversification programs implemented by Middle Eastern and North African countries
- The global market is highly competitive with Vale and Rio Tinto leading in terms of production capacity and market share.