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Asia Pacific Iron Ore Pellets Market

Asia Pacific Iron Ore Pellets Market Size to Portray Potential Growth by USD 31.65 Billion in 2030

Published On : 07 Nov, 2022
Updated On : 08 Nov, 2022
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Market Snapshot

Base Year:
2021
Study Period:
2020-2030
CAGR:
5.5 %

Pellets are little iron ore balls used in steel production. They're manufactured employing technology that makes use of the leftover powder generated during the ore extraction process. Pellets are used to make steel, which is used to build bridges, automobiles, planes, bicycles, household goods, and much more.

However, the ore must first pass through a blast furnace, which can only operate when air can smoothly and freely circulate. As a result, the material must be large enough to allow for gaps between each component. Furthermore, the ore must be robust enough to avoid crushing and blocking the blast furnace. As a result, pellet manufacturing is critical to the steelmaking process. The iron ore pellets global market size was valued at USD 42,722 million in 2021 and it is expected to grow at a commendable growth rate of 5% during the forecast period (2022–2030). For the Asia Pacific region, it is expected to be 31650 million USD in 2030 growing at a rate of 5.5 % CAGR. Iron ore pellets are used more frequently in developing countries because they emit less pollution and dust than other materials. This drives the iron ore pellets market. The iron ore pellets market may be constrained by raw material price changes.

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Market Dynamics

Asia Pacific Iron Ore Pellets Market Drivers

  • Manufacturing of iron-based coagulants and chemicals: Despite their primary usage in steel production, iron ore pellets are also utilised in the creation of iron-based compounds and coagulants. Coagulants come in a variety of forms, including ferric sulphate, ferric chloride, and ferrous sulphate, and are utilised in a variety of applications, including metal treatments. Increasing demand of iron-based coagulants and chemicals in Asia Pacific region would enhance the market of iron ore pellets in the region.
  • Incessant Production of Various Types of Steel: The sustained demand for steel in various locations is projected to drive demand for iron ore pellets. Steel is widely employed in a variety of industries, including construction, automotive, oil and gas, appliances, industrial machines, and other operations. One of the main end-use industries for steel products is construction. Construction accounts for more than half of global demand, according to the World Steel Association. One of the major factors fuelling interest in steel is the growing need for housing due to population growth. According to the United Nations' World Population Prospects, the global population is expected to reach 8.6 billion by 2030. This is expected to increase demand for new homes along these lines, thereby contributing to the growth of steel products and iron ore pellets.

Asia Pacific Iron Ore Pellets Market Restraints

  • Price changes in raw materials: As the raw material demand is directly linked to steel consumption, which confronts fierce competition from imports, iron ore user companies have anticipated significant losses in operating their businesses with such high raw material prices. Increase in raw material prices has the potential of
  • Availability of Substitutes- Significant Obstacle: The use of aluminium as a steel alternative, mostly in automobiles, is expected to reduce demand for steel, limiting the growth of the iron ore pellets industry. The lightweight nature of aluminium, along with its solidity, is the primary reason for its increasing use in cars. This advances eco-friendliness and vehicle performance, as well as assisting producers in adhering to the stringent standards imposed by various government organisations to dispose of waste in a safe and secure manner. Automobile manufacturers are under increasing pressure to meet administrative requirements relating to vehicle natural effects. Due to increased emanation of ozone-harming compounds, the Corporate Average Fuel Economy (CAFE) guideline, which began in the United States, has increased its goal for normal eco-friendliness from 2012 to 2025. Essentially, the European Union is updating its recommendations to reduce vehicle weight and increase environmental friendliness.
  • As a result, concepts and approaches to car vehicle weight have been adjusted all over the world. The use of aluminium to reduce vehicle weight is expected to play a critical role in achieving administrative requirements.

Key Market Opportunities

  • Advancement in technology: Electric arc furnace steelmaking technology is expected to grow at a rate of around 4.5% per year, owing to its good metallurgical control and minimal carbon emissions. The aforementioned considerations are anticipated to drive demand for electric arc technology to update current facilities or expand operations. Hematite-based iron ore pellets are expected to have a considerable market share due to their low particle attrition rate and high specific gravity. Furthermore, this type of source is widely available throughout the region, thus serving as a growth stimulus for the business.

Segment Overview

The Asia Pacific iron ore pellets market is divided into two categories: product and trade. The worldwide iron ore pellets market is divided into blast furnace grade and direct reduced grade pellets based on product. The direct reduced grade pellets category is the most dominant, with an expected market value of USD 28,958 million by 2030, growing at a CAGR of 5%, an incredible increase from the previous market statistics of USD 18,384 million in 2021. BF Iron pellets are also expanding at a good rate and major the factor pushing the expansion of the Blast Furnace category is the lower price of these iron ore pellets, which is aggregated with the number of integrated steel mills prevalent in developed countries. Direct reduced iron is a fantastic natural resource used in steel production. The direct decrease technique uses DR iron pellets to remove artificially bound oxygen from pellets and irregularity ores without causing them to dissolve. Direct decrease iron contains a lot of iron ore and very little copper, as well as other undesirable metals and small components. Steel made from direct reduced iron can be used for a variety of purposes, including consistent cylinders, plates, fashioning bars, fine wire, and drawing items.

Over the next few years, the demand for a reliable and clean source of iron is expected to rise due to increased steel interest. This is likely to increase demand for DR grade iron metal pellets. The blast furnace grade pellets segment has a considerable market share, with a market value of USD 22,287 million in 2021 and a CAGR of 5% to USD 38,439 million by 2030. The rate of steel production in China has an impact on blast furnace pellet usage patterns. The required oxygen heaters have completely swamped China's steel production. Almost 89.6% of all general raw steel shipped in China is processed by basic oxygen heaters. This method of steelmaking necessitates a large quantity of blast furnace-grade pellets. In comparison to the direct decrease procedure, the blast heater process for steelmaking takes more capital. Furthermore, the former requires coke for steel production. In comparison to BF grade iron ore pellets, DR grade iron metal pellets have a higher entrance. Because they are manufactured from low-grade ores that have gone through ore beneficiation, blast furnace grade iron metal pellets have a high Fe (Iron) concentration.

When separated by trade, the iron ore pellets market is further divided into captive and seaborne, with the seaborne sector dominating the market with a projected revenue of USD 35,414 million by 2030 at a CAGR of 5%, up from an early figure of USD 21,958 million in 2021. The term "seaborne exchange" refers to the movement of press metal pellets across the ocean. Mass items, notably ores and metals, represent a considerable offer in the global seaborne exchange.

The exhibition of dry mass products has been driven by iron metal for the past 10 years. Iron metal exchange development has also been faster than in other freight segments. According to our research, the iron metal trade has grown by more than 250% in the last twenty years. The Captive trade segment has the second highest market value, with a market share of USD 18,719 million in 2021 and a CAGR of 5% from 2021 to 2030 of USD 29,981 million.

Iron ore pellets delivered for self-use or regional interest cooking are included in captive trade. Some of the firms that work together across the value chain have their own captive mines, which provide a steady supply of raw materials.

Regional Overview

Asia Pacific Iron Ore Pellets Market Countrywise Analysis

Regional Growth Insights Request Sample Pages

With a CAGR of 6%, the Asia-Pacific region will lead the global market by 2030, with an estimated market value of USD 31,649 million, up from USD 18,485 million in 2021. Asia Pacific dominated the iron ore pellet market in 2020, and it is likely to do so again throughout the forecast period. This could be owing to China's large steel manufacturing base. According to the data, China will produce more than half of all world crude steel in 2020. Furthermore, because many parts of China have already begun industrial operations, a quick and effective recovery from the COVID-19 pandemic in 2020 is expected to aid China's market growth. One of the driving factors for Asia Pacific iron ore pellets market is a high concentration of product manufacturers in the region. Crude steel output in large economies like China and India has increased significantly, from 920.0 million tonnes in 2018 to 996.3 million tonnes in 2019, and from 109.3 million tonnes in 2018 to 111.2 million tonnes in 2019. Apart from India, China, Japan, and South Korea, smaller ASEAN economies are also growing rapidly as a result of government initiatives and urbanisation.

Major Players

Some of the major players in the Asia Pacific Region (having significant market shares) are listed below:

  • TATA Steel
  • Vale
  • KIOCL Limited
  • FERREXPO
  • Mitsubishi Corporation RtM Japan Ltd
  • Bahrain Steel
  • ArcelorMittal

Recent Developments

  • In December 2021, Tata Steel was featured in the top 10 companies in the global steel industry in Dow Jones Sustainability Indices (DJSI)
  • In December 2021, Vale, a Brazilian company, partnered with Ningbo Zhoushan, a Chinese company, to launch an iron ore product, GF88.

Asia Pacific Iron Ore Pellets Market Segmentation

By Product

  • Blast Furnace Grade Pellets
  • Direct Reduced Grade Pellets

By Trade

  • Captive
  • Seaborne

By Region

  • China
  • Japan
  • India
  • South Korea
  • Singapore
  • Malaysia
  • Rest of Asia Pacific
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