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Iron Ore Market Analysis
While a highly consolidated supply market will offer a favorable pitch for iron ore suppliers, it will render the procurement scenario highly complex for buyers in the iron ore market. This consolidation will reduce buyer's negotiation power which will limit their avenues to save costs during procurement in this market. Heightened political tensions among the key economies are creating serious roadblocks in the free-flow of steel between geographies. This is disrupting the demand and supply equilibrium in the steel industry which is resulting in a direct impact on the price structure of the iron ore market. According to the iron ore price trends, such factors will result in frequent volatilities in the prices of iron ores across the globe. At the same time, factors are at play which will ensure momentum in investments into the iron ore market. This is reflective in the spend growth of the iron ore market that is expected to touch a value of over USD 20 billion. The steady increase in the demand for steel from the construction and heavy equipment manufacturing industries will be one of the key factors that will drive the spend growth in the iron ore market.
For industries that are heavily dependent on their inventory of iron ores, it is extremely critical for buyers from such organizations to acquire the assurance of iron ore supply of consistent quality over the procurement period. This can be achieved by partnering with iron ore suppliers who have displayed strict adherence to all relevant regulations, such as mining and labor regulations, during their previous contract engagements.
Download the free sample of this report to know what the key category management objectives that you must adopt to address the predicted price dynamism in the iron ore market.
External factors will agitate the demand and supply equilibrium in the steel industry which is one of the chief users of iron ores. Instances of mining accidents and meteorological factors will have direct impacts on the prices of iron ores which are expected to remain extremely volatile during the forecast period. For buyers, such a volatile price structure will impact their TCO, ultimately resulting in an excess procurement spend in the iron ore market.
Iron Ore Price Trends:
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The selection of suppliers with the market dynamism in mind is the next best step in the dynamic iron ore market. Engagement with vertically integrated iron ore suppliers, evaluating the efficiency of the supplier's logistics and distribution network, are some of the critical iron ore suppliers selection criteria.
Adopt a regional sourcing model
With the iron ore price trends in mind, buyers must adopt a regional sourcing model. This will benefit the buyers with reduced logistics expenses, ensure vicinity with iron ore suppliers' facilities, and open access to regional suppliers with better awareness of regional laws and regulations.
Identify iron ore suppliers that provide assistance in demand and price forecasting
Considering the fact that the iron ore market will be characterized by demand dynamism, it is prudent of buyers to partner with iron ore suppliers who are known to adopt advanced analytical tools to accurately forecast prices and demand for iron ore for the duration of the contract. This will benefit the buyers with optimization of procurement timing and costs, minimization of inventory and lower inventory holding expense, and better planning of delivery timelines.
Criteria to select suppliers in this dynamic iron ore market is subject to change based on the day-to-day market outlook. Get the free sample of this iron ore market procurement intelligence report to gain immediate access to real-time insights to the changing iron ore suppliers selection criteria.
Top Regions in the Iron Ore Market
Increasing investments in infrastructure construction and initiatives taken by governments to support the steel production industry will contribute to the spend growth of the iron ore market across geographies.
The governments in this region are making investments in infrastructure construction projects such as the Smart Cities Mission launched in India. This is driving the demand for steel which is consequently creating the demand for raw materials such as iron ore from the steel production industry in the region.
The need for repair, maintenance, and upgradation of existing public infrastructure, and the requirement for new public infrastructure constructions due to the growth in population are expected to drive investments in infrastructure construction projects in the US during the forecast period. Consequently, this will drive the demand in the iron ore market in the region. The growth in demand for steel and the subsequent increase in domestic steel production will also increase the demand in the iron ore market in the US.
Insights Offered in this Iron Ore Market Report