QINGDAO, China, Sept 24 (Reuters) - Iran’s iron ore exports may stop from 2019 due to low prices and as it consumes more of the raw material in its bid to more than triple steel production by 2025, said an industry executive from the country.
From 23.6 million tonnes in 2013, Iran’s iron ore shipments are likely to drop to 15-16 million tonnes this year and to less than 10 million tonnes by 2017, said Keyvan Jafari Tehrani from the Iron Ore Producers and Exporters Association of Iran (IROPEX).
“And maybe from 2019 onwards, there will be no quantity to export from Iran,” Tehrani, who oversees international affairs at IROPEX, told Reuters on the sidelines of an industry conference in the Chinese city of Qingdao.
Iran exported 22 million tonnes of iron ore in 2014, the ninth biggest in the world, according to data from the International Steel Statistics Bureau. But that was just a fraction of the 754 million tonnes from top shipper Australia.
A 60-percent slide in iron ore prices over the past two years has shut higher cost mines globally, including many in Iran, leaving a big chunk of the Chinese market - the largest for the raw material - to low-cost suppliers from Australia and Brazil.
From around $57 a tonne .IO62-CNI=SI currently, analysts polled by Reuters expect iron ore to average $50 over the next two years amid signals that steel demand in China has peaked or is close to peaking.
Iran’s exports of the bulk commodity to China fell nearly 50 percent to just over 8 million tonnes in January-August, based on Chinese customs data.
Iran also needs more iron ore at home as it plans to lift steel output to 55 million tonnes by 2025 from 16.3 million tonnes last year.
That goal would need 159 million tonnes of iron ore a year, said Tehrani, with last year’s production only reaching 45 million tonnes.
The Islamic country is seeking foreign investment to help extract more iron ore, with domestic reserves at 2.5 billion tonnes, nearly triple South Africa, one of the world’s main producers, according to the U.S. Geological Survey.
“We have enough reserves. What we need is new machinery, new technology, more investment,” said Sadjad Ghoroghi, a member of the IROPEX board.
Data from IROPEX and Iran’s state-owned mines and metal holding company IMIDRO put the country’s iron ore reserves at 5.2 billion tonnes.
The removal of economic sanctions on Iran, possibly by next year following a deal with the West over its nuclear programme, is seen encouraging foreign business into the country, although most prospective investors remain cautious.
“Most of them are waiting to see what will happen post-sanctions,” said Tehrani.
Reporting by Manolo Serapio Jr.; Editing by Joseph Radford