{"id":2544,"date":"2026-06-20T23:40:47","date_gmt":"2026-06-20T23:40:47","guid":{"rendered":"https:\/\/reliablemovingcrews.com\/?p=2544"},"modified":"2026-06-20T23:40:47","modified_gmt":"2026-06-20T23:40:47","slug":"iron-ore-industry-sees-a-bright-future-but-green-steel-fades","status":"publish","type":"post","link":"https:\/\/reliablemovingcrews.com\/?p=2544","title":{"rendered":"Iron ore industry sees a bright future, but green steel fades"},"content":{"rendered":"
SINGAPORE, June 18 (Reuters) – The most persistently bullish part of the commodities sector in recent years has been metals associated with the energy transition, such as copper, lithium and rare earth elements.<\/div>
Iron ore miners want their product to be added to the list.<\/div>
Strong demand growth for steel in South and Southeast Asia will keep \u200bdemand for the raw material robust, and more than outweigh declining production in China and the Western world.<\/div>
That was the consensus view at this week’s industry \u200cgathering in Singapore.<\/div>
However, the optimism of iron ore miners wasn’t replicated by advocates of decarbonising the industry, with a shift away from seeing green steel as the great hope due to the bitter realisation that it will be enormously costly.<\/div>
Governments currently lack the will to legislate, regulate and incentivise a switch from making steel with coal to using renewable energies.<\/div>

LOOMING SUPPLY GAP<\/h2>
The bullish mood in iron ore is largely built around forecasts that India will increase \u200bits steel production from around 168 million metric tons a year currently to around 400 million tons by 2035.<\/div>
India is a small net exporter of iron ore, with \u200bexports of 28.62 million tons in 2025 balanced against imports of 13.87 million tons, according to data compiled by commodity analysts Kpler.<\/div>
If India does \u2060more than double steel production in the next 10 years, it would almost certainly have to boost imports, as its domestic industry would be unable to mine sufficient quantities of ore with \u200bhigh enough iron content to be economically viable.<\/div>
There is also optimism that Southeast Asian countries such as Vietnam, Indonesia and Thailand will build more steel capacity as their economies continue to industrialise, and \u200bthese will largely depend on imported iron ore.<\/div>
Rio Tinto Chief Commercial Officer Bold Baatar told the Singapore Iron Ore and Steel Forum that there is a looming supply gap of 650 million tons of iron ore by 2035.<\/div>
The figure accounts for new mines such as the 120 million ton-per-year Simandou project in Guinea, which is in the process of starting up.<\/div>
However, Rio expects that the pace of new mine development will not match the \u200bloss of tons as mines reach the end of life.<\/div>
Another factor supporting miners such as Rio, which is the world’s largest producer of iron ore, is that most of the new steel \u200bcapacity being built in Asia uses the traditional blast furnace-basic oxygen furnace (BF-BOF) method of production.<\/div>
This method is proven and cost effective, but also highly polluting, as it relies on metallurgical coal.<\/div>
Steel-making accounts for about 8% \u200cof global carbon \u2060emissions, making decarbonisation vital to reach climate ambitions of net zero by 2050.<\/div>
But while miners and steel makers are keen to talk about decarbonising their operations, the reality is that they are really only going after some low-hanging fruit with plans to increase efficiencies and use higher-grade iron ore.<\/div>

GREEN SHOOTS FADE<\/h2>
Any real effort to meaningfully reduce emissions involves switching from coal to hydrogen as a reductant, and renewable electricity as a power source.<\/div>
But so far very little capital has been allocated to producing green steel.<\/div>
Zhong Shaoliang, the deputy secretary general of the World Steel Association, told the Singapore \u200bGreen Steel Forum on Wednesday that only $20 billion \u200bhas been invested in supporting green steel \u2060production.<\/div>
This has led to an expected capacity of 70.8 million tons of green steel production by 2030, the bulk of it in Europe.<\/div>
Given that global steel production is expected to be closing in on 2 billion tons a year by 2030, the planned green steel output is less than \u200b4% of the total.<\/div>
The problem is that there is no global standard for green steel, and carbon taxes such as the Carbon Border \u200bAdjustment Mechanism in Europe aren’t \u2060widespread enough to drive a meaningful shift to green steel.<\/div>
The current cost of producing steel using the BF-BOF method is around $400 a ton, according to the World Steel Association data presented this week.<\/div>
However, using renewable hydrogen and electricity lifts the cost to between $500 and $850 a ton, depending on the location of production.<\/div>
The only way to close that gap is for governments to regulate in favour of green steel, \u2060either by taxing \u200bmore polluting methods or by subsidising less carbon-intensive production.<\/div>
The problem is that there is scant evidence of this happening \u200bin Asia, which is the dominant producer of steel and the engine room of future growth.<\/div>
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The views expressed here are those of the author, a columnist for Reuters.<\/div>
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.<\/div>