Iron Ore Pellets Market Trends

This market for iron ore pellets is growing at a rapid rate on account of increased demand from the steel industry. Iron ore pellets are generally used in the production of steel due to uniform size, high iron content, and low impurities, which enhance the efficiency of furnaces and reduce emission. Indeed, global steel production has been on an upward trajectory, especially in emerging economies such as India and China, which should keep demand for iron ore pellets firm.

Government reports indicate that India's ministry of steel has achieved a 14% increase in domestic steel production in the year 2022 compared to 2021. India is targeting to double its steel output in 2034, and the Chinese government's focus on cleaner, more efficient steel production under its "dual-carbon" policy goals will support long-term pellet demand. According to USGS statistics, global iron ore production increased from 2.4 billion metric tons in 2021 to about 2.6 billion metric tons in the year 2022 and is on a broader trend itself

Supply chain constraints, largely influenced by geopolitical tensions and trade policies, affect the pellet market's dynamics, often leading to price volatility. Another key factor influencing demand is the rising use of electric arc furnaces in developed markets such as the US and Europe; as EAF-based steel production requires high-quality pellets. Government policies to promote green steel and accelerate decarbonization spur further expansion in the pellet market, pushing iron ore pellets to become a critical input product in sustainable steelmaking globally.