The global iron ore supply mainly comes from the four major mines, and the supply situation of the four major mines largely determines the global iron ore supply pattern. Recently, the four major mines have released the latest operating data, with the iron ore production data of 2023 natural year, Rio Tinto continues to hold the throne of the world's largest iron ore producer.
On January 16, Rio Tinto announced its production results report for the fourth quarter of 2023. In the fourth quarter of 2023, Rio Tinto's iron ore production (100% interest) reached 87.5 million tons, down 2% year-on-year and up 5% quarter-on-quarter; In 2023, Rio Tinto's iron ore production reached 332 million tons, an increase of 2%. From the point of view of iron ore shipments, in the fourth quarter of 2023, Rio Tinto iron ore shipments reached 86.3 million tons, down 1% year-on-year, an increase of 3%; In 2023, Rio Tinto's iron ore shipments reached 332 million tons, an increase of 3%.
On the 2024 production guidance target, Rio Tinto said in the report that the 2024 production guidance target for each product has remained unchanged since December 2023, and the Pilbara iron ore shipment is still expected to be 323 million tons to 338 million tons, which has not changed since October 2023. Production at the SP10 site is expected to remain at a high level until the delivery of the replacement project, subject to the timing of the approval of the planned site and heritage clearance. From the perspective of C1 cash cost guidance, Rio Tinto said that based on the average effective exchange rate of 0.66 Australian dollars to US dollars in 2023, the unit cost guidance for Pilbara iron ore in 2023 remains in the low range of US $21.0 / tonne to US $22.5 / tonne.
On January 29, local time, the Brazilian mining giant Vale released the fourth quarter of 2023 and 2023 annual production and sales report showed that in the whole year of 2023, Vale's iron ore production reached 321.2 million tons, an increase of 4.3%, higher than the production guidance target of 315 million tons. Among them, in the fourth quarter of 2023, Vale's iron ore production reached 89.4 million tons, an increase of 11%. In December, the company's iron ore production reached its highest monthly output since 2018.
Despite the stronger-than-expected growth in iron ore production, Vale still has a gap of about 3.2% over Rio Tinto, which has narrowed from the previous year. Rio Tinto retains its title as the world's largest iron ore producer. It has been sitting on the "throne" for five consecutive years since 2019.
For 2024 production, Vale expects to remain in the range of 310-320 million tonnes, with the upper end slightly below Rio Tinto's production guidance.
BHP Billiton and FMG, two of the big four mines, still have a significant gap in iron ore production. BHP Billiton's iron ore production in 2023 will be 295 million tons, up about 12% year-on-year and about 8.16% lower than Vale. Its 2024 production guidance remains unchanged, with iron ore production remaining at 282 million to 294 million tonnes. FMG Group's iron Ore production (Ore Processed iron ore) in the fourth quarter of 2023 was 48.7 million tons, an increase of 1.5% quarter-on-quarter and a decrease of 2.6% year-on-year. For the whole year, the natural annual iron ore production in 2023 was 191 million tons, an increase of 1.1%. Its fiscal 2024 guidance for total shipments remains unchanged at 192-197 million tonnes.
In total, the four major mines will increase their output by 19.53 million tons in 2023. Looking forward to 2024, with the production capacity of a number of new mine projects and the release of capacity of some existing mine projects, the four major mines are expected to add about 15 million tons of capacity, the overall global iron ore supply will remain loose, iron ore prices or will follow steel prices fluctuate.
