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Today, China produces half of the world’s steel, some two million tonnes per day. It imports 80 million tonnes of iron ore a month and accounts for two thirds of seaborne demand. On the supply side, Australia is the largest exporter of iron ore with 2015 exports of 760 million tonnes.

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If pig iron and steel prices can rise by $15-20/mt it may be better to limit additional pellet sales, as the steel price would cover the increase in the pellet premium. Russia's larger iron ore miner Metalloinvest shipped 58% of its iron ore pellets externally in 2016, while in Q3 2017, external pellet sales had fallen to 48%.

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"Australia's major iron ore suppliers are highly cost competitive and are expected to displace higher cost and lower quality Chinese mining operations," the report said. The department expects the iron ore price to decline to $49/mt FOB Australia in 2019, from $53/mt FOB Australia in 2018.

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LKAB also mines and sells minerals through LKAB Minerals, including processing and selling iron ore for applications outside of the steel industry. LKAB Minerals sells Iron Ore Pellets for specific other industries, for use in Ferro Alloy and Catalyst production.

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Iron Ore Imports into China. Below are the top 15 suppliers from which China imported the highest dollar value worth of iron ore during 2017. Within parenthesis is the percentage change in value for each supplying country.

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