Wood Mackenzie's metals markets reports provide in-depth analysis and forecasts of global and regional metals market fundamentals. We produce detailed supply, demand and price forecasts for the five key base metals - aluminium, copper, lead, nickel, and zinc - as well as iron ore, steel, stainless steel, steel alloys, noble alloys, cobalt, lithium, graphite, rare earths, and other specific market groups - cathode & precursor, electric vehicles & battery supply chain, and solar and raw materials.

The standard deliverables are:

Our long-term outlook is released in two different formats: the “Strategic Planning Outlook” in the first half of the year and the “Investment Horizon Outlook” in the second half. The Strategic Planning Outlook and provides a comprehensive view of global and regional markets, with data and analysis to 2050. The Investment Horizon Outlook provides analysis of the investment landscape, together with the market implications, for current and anticipated investments for the next 10 years, with data available out to 2050.

The key sections in a Wood Mackenzie long-term market outlook are below, although these may vary depending on the market we are covering:

The research is supported by Wood Mackenzie's key macroeconomic assumptions, including GDP and IP, as well as our integrated research across the wide variety of other sectors that Wood Mackenzie covers – power, renewables, oil, gas, chemicals, energy transitions research. We develop coordinated view for our assumptions on key demand drivers such as auto production, housing construction, renewables, grid development, EV charging, and other relevant macro factors. The supply research is supported by Wood Mackenzie's cost teams who have a rigorous mine, smelter, and plant visit programme.
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Wood Mackenzie employs several different data sources and methodologies to produce its metals markets forecasts. The market forecasts are created using proprietary supply data, which are built up by asset including future projects. We also use our own demand research coupled with detailed trade data to complete our country balances and stock build-up or draw-down – developing a market balance. From here, we derive a price based on the expected market surplus or deficit along with our detailed cost curves and pipeline for new projects.
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Wood Mackenzie's research analysts conduct extensive and detailed research into their respective focus areas - conducting primary research wherever possible leveraging site visits and our strong industry connections. We use a wide variety of sources, but we do not purchase data other than from entities which own the data and are entitled to sell it to us.
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We use several internal data sources to compile our metals views, including.

The primary external data sources used by Wood Mackenzie to develop its fundamental short-, and long-term metal market analyses are shown in the table
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Our data are subject to a rigorous integrity checking and quality control process. We have developed a comprehensive set of checks, which are carried out on a regular basis, at a country, regional and global level.
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We calibrate forecasts against historical actual figures to maintain quality and consistency. Our goal is to keep metal balances accurate and to account for metal flows wherever possible.

We review our coverage regularly to ensure we are conducting the appropriate analysis for the major metals’ importing and exporting countries.

Base metals

We cover the five major base metals and all major producing or consuming countries. Our coverage includes the entire value chain from mines to smelters and refineries to first-use consumption, whether that is billet, rod, slab, or ingot. Where possible we analyse end-use drivers of first-use consumption.

We provide complete coverage of global iron ore demand, supply, and trade. We have mine coverage for key iron ore supply countries such as Australia, Brazil, South Africa, Canada, Chile, Peru, Russia and Ukraine. We do not have comprehensive company data in China, India, and Iran. We develop smaller, less granular models for countries that are not major participants in the seaborne market.

We provide detailed analysis of the global steel industry, covering 120+ countries. We provide 20 to 30 years forecasts for steel demand by end-use for key countries like China, India, Russia, Brazil, Japan, EU27+UK, and the United States, apparent finished steel consumption, a detailed capacity database for hot metal, DRI, and crude steel, trade forecasts, and steel and metallics prices. We also provide data on carbon emissions by country, information on upcoming technology like CCUS and hydrogen-based steelmaking, and a comprehensive database detailing upcoming decarbonisation initiatives being taken by steel industry stakeholders around the globe.

As part of the integrated cross-sector modelling cycle, Wood Mackenzie updates its long-term fundamental metals market analyses quarterly. Our long-term market outlooks are released in March, June, September and December of each year. The long-term outlooks released in March and June are called the Strategic Planning Outlooks (SPO). The long-term outlooks released in September and December are called Investment Horizon Outlooks (IHO), and provide a 10-year forecast for investments by the industry in addition to the regular long-term outlook sections.
Our short-term market reports are released at the end of each month, except for iron ore and steel, which produces ten monthly reports per year – excluding March and September.

Wood Mackenzie develops its view of the market using publicly available information, information gathered from interaction with industry participants, and model results. Using this information, we compile drafts of our long- and short-term reports, insights, and other deliverables. Prior to publication, our reports are subject to rigorous internal peer review. This review includes participation from other market team members (each analysis is proofed by at least one other analyst) as well as representatives from other appropriate Wood Mackenzie research teams.

Also, we are regularly in touch with the industry and clients to discuss and validate our assumptions and data. In instances where our analysis has a corporate focus, we regularly provide a draft to the appropriate companies for their review and comment. This stage of the process is designed to ensure that each report is as accurate as possible, within the limits of what may be differing market views amongst the various participants. The final analysis produced is always Wood Mackenzie's market view and may not necessarily reflect the views of other parties.

There is a strong correlation between metal consumption growth and industrial production (IP). Our economic forecasts take short-term future economic cycles (usually up to five years forward) into account. Beyond this, we revert to a long-term trend growth rate. We forecast long-term metal consumption annually by building up semi-finished metal production based on end-use demand drivers and other factors such as trade.
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We define intensity of use as consumption of primary metal (tonnes) per unit of industrial production. Short-term forecasts modify these long-term estimates to reflect changes in first-use sectors, such as the start-up or shutdown of first-use capacity, and trends in end-use sectors, such as construction and the automotive industry.

Our steel analysis uses a combination of bottom-up and top-down approaches to form our view on demand.
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We use the bottom-up approach for the key areas of global steel demand, namely the US, EU27+UK, Japan, Brazil, Russia, India and China. For these regions, we have developed end-use sector wise steel demand models. We divide steel demand into six different sectors - construction, automotive, machinery, household appliances, shipbuilding, and others. Growth for each sector is forecast using sector drivers.
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For example, for the automotive sector, we estimate an average steel used per car. We make assumptions about expected changes to the weight and material preferences. We link these estimates to our internal automotive production forecasts. Alternatively, if statistics are scarce, we may run an econometric model on a certain steel-consuming sector or sub-sector and use a growth driver of best fit to determine the forecasts. For example, we have found a strong relationship between household appliances growth and residential, commercial and agriculture energy demand (available as part of our energy markets reports).
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For all other countries, we use the top-down approach, where we use steel intensity to GDP and per capita steel consumption models.

We develop iron ore demand forecasts using our long-term forecasts for steel production by country, by technology (i.e. basic oxygen furnace, electric arc furnace, etc.) and by hot metal production.
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The iron-making stage in steel production underpins our iron ore demand data. The two components of iron making are the production of hot metal via the blast furnace and direct reduced iron (DRI). Both these operations consume iron ore, although the blast furnace accounts for the vast majority of iron ore consumed worldwide. We derive our hot metal and DRI production projections from our crude steel production trends. These are based on our in-house macroeconomic forecasts and known upcoming capacity additions.
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We use ore consumption to forecast demand for iron ore. This is the amount of iron ore consumed per tonne of output (hot metal or DRI). A simple rule of thumb is that around 1,650 kg of iron ore is needed to produce one metric tonne of hot metal. This will vary by plant and our country ore consumption is based on individual plants. Around 1,500 kg of ore is required per tonne of DRI.
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We break down ore consumption by ore type. In the blast furnace, iron ore is charged in the form of sinter, lump ore and pellets - and is often referred to as the burden mix. Future trends in iron ore consumption by product are formed by adjusting the component (sinter, lump ore and pellets) rate of ore consumption.
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The metal markets supply forecast is built up by asset, then by country and region. This coverage constitutes the vast majority of the global output of a given commodity.
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The analysis of mine, smelter and refinery production is used in the concentrate studies to construct supply-driven and demand-driven chains for concentrates-intermediates and metal to establish the surpluses/deficits throughout each chain.

Mine and smelter production

Mine and smelter production forecasts are compiled based on the following considerations.
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All operational mines and smelters are included in our base case forecasts. We have made allowances for future closures based on known planned closure dates or proven plus probable reserves and measured, indicated, or inferred resources.
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New projects are included in our base case if they are approved, fully financed, or under construction. If projects do not have financing in place, only those projects deemed highly likely to proceed based on their individual merits are included in our forecasts (as base case – project).
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Forecast mine and smelter production is based on production capability. This is defined as production that could reasonably be anticipated after allowing for normal disruptions. Extraordinary factors such as labour strikes, major plant failure, and other unpredictable events are not considered.
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Individual mine production forecasts take into account known or anticipated technical developments relating to grade trends, stripping ratios, mining configuration, and metallurgical performance.
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No adjustments are made to individual mine production capability forecasts because of forecast supply and demand imbalances. When necessary, a market-driven adjustment is included in the overall supply and demand analysis. This adjustment may be negative, representing forecast production cuts when the market is heading for an unsustainably large surplus, or positive when forecast market demand requires new incremental output, which cannot be attributed to individual mine expansions or new projects yet.

No adjustments are made to individual smelter production capability forecasts because of forecast supply and demand imbalances until either an expansion or a cut in production (permanent or temporary) is confirmed. When necessary, a market-driven adjustment is included in the overall supply and demand analysis. This is split into three.

Firstly, an allowance for new production which cannot be identified specifically to named operations. There is always a general inducement to construct new smelter capacity to meet growing market demand, but companies usually commit to build additional capacity for more specific reasons, i.e. to maintain or increase market share in response to competitor action, to achieve economies of scale, or to match an increase in integrated mine output.

Secondly, some metals include a specific allowance for general disruption. This is set at a given percentage of forecast capability which may vary by metal, and is to accommodate all the minor events that often prevent operations from achieving planned output. It does not include an allowance for major disruption events (major equipment failure, labour strikes etc.) that are more infrequent. These do not have a regular pattern of occurrence and cannot be forecast reliably.

Thirdly, there is a market-driven adjustment. When the refined market is in oversupply and approaching critically high stock, or has the potential to move to significant surplus the production adjustment is also used to forecast price-induced or market-induced production cuts and closures required to return the refined market to balance. It is also used to show production cutbacks stemming from limited raw material supply.

This is used to show either additional secondary production that is required to prevent under-supply in the refined market, or cutbacks forecast on market conditions which cannot be attributed to specific operations until an expansion, new operation or a cut in production (permanent or temporary) has been announced. For copper, individual refineries have been classified into one of two groups:

Electro and fire-refineries treating blister/anode, and electrowinning plants recovering copper from concentrates, residues, and smelter dusts. Any sub-grade (blister quality) material from the electrowinning plants is also either re-refined or sold as unrefined product (direct use of blister). As for smelters, the production capability of each refinery is determined for both primary and secondary feed sources.

Project definitions

Unlike brownfield and greenfield projects, mine life extensions are difficult to forecast individually as the amendment of ore reserve classification and announcement of mine life extension tend to be simultaneous and therefore not possible to forecast in advance.

Concentrate tonnage allocations are made on the basis of the following order of precedence:

In the case of China, the allocation of Chinese domestic mine production to domestic smelters is made according to the following precedence: known deliveries, common company ownership of mine and smelter, geographical proximity.
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We forecast iron ore supply for every major exporting country by company and asset for different products. We include supply from existing mines and known projects.
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In the supply analysis, production forecasts include operating mines/assets, base case – projects, probable projects, and possible projects. Our base case supply forecasts include all operating assets, plus all base case – projects.
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Wood Mackenzie also follows a significant number of projects at the drilling stage or in the early stages of scoping. These potential developments and some of the poorer-quality projects are omitted from the published database but followed internally pending changes in status.

Trade data is summarised as follows:

Our steel supply analysis is based on our historical production and capacity data. We also develop steel capacity forecasts by plant. We derive crude steel production from our steel demand forecasts plus or minus steel trade (adjusted for yield loss). We estimate steel production by blast oxygen furnace, electric arc furnace or open-hearth furnace based on our detailed steel plant capacity database, capacity utilisation assumptions and historical figures. We make assumptions on how preferred production routes will change considering cost competitiveness, environmental legislation, etc.

Wood Mackenzie produces a supply and demand balance for each metal. The line by line balancing methodology is explained for each base metal in the tables.

Our short- and medium -term base metal price forecasts are based upon a common set of assumptions, including but not limited to:

These are used in conjunction with the global metal market balance to devise our price forecasts. From five years out our demand forecasts revert to trend growth and it is therefore not appropriate to forecast prices based on uncertain assumptions of market conditions and balances. From there, our price forecasts go to trend, based on a market in balance, and with consideration for long run incentive prices.
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Our short-term price analysis and forecasting employs a number of factors, including, but not limited to:

For medium term price forecasting, we look at the global iron ore trade balance and the marginal cost of production as a guide. In terms of pricing of iron ore over the medium term, this is largely dependent on the displacement of Chinese domestic iron ore with lower cost and more consistent quality imported ore. Just how far prices will fall over the medium term can be estimated by looking at Chinese costs in more detail, and for this we utilise cost curves developed by our iron ore costs team.
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While our medium-term price forecast is based on an assessment of the future balance between supply and demand in the global seaborne market, as time horizons extend and visibility declines, it is more appropriate to base long-term price assumptions on a combination of long-run marginal cost and incentive price analysis. Our incentive price estimates are the average real prices, adjusted to the respective benchmark prices, which allow each project to achieve a given internal rate of return. Incentive prices are determined by our operating cost estimates, our capital cost forecasts and our target rate of return assumptions.
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We forecast benchmark prices for hot-rolled coil (HRC), rebar and metallics for key regions. As a first step, our steel supply analysts forecast hot metal production costs, including fundamental analysis from our iron ore and metallurgical coal teams. These hot metal forecasts are used as a base to forecast metallic prices for various regions. For metallics, we provide scrap prices for China, Europe, Turkey and the US as well as Russian pig iron prices.
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For our steel price forecasts, we use our proprietary steel production costs plus margins, which are determined by our supply/demand balances to give a finished steel price. We provide HRC and rebar prices for China, Europe, and the US. For India, we only provide HRC prices
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Wood Mackenzie has developed proprietary models for use in forecasting base metal demand. These utilise a holistic approach taking into account macroeconomic indicators such as GDP, industrial production, population growth and urbanisation rates to model long-term trends in metals demand growth on a country-by-country basis. In the near to medium term, the power of this approach is enhanced through the use of sectorial forecasts for the automotive and construction sectors of most major economies, along with plant production databases, analysis of international trade flows, and market intelligence.
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The supply model tracks and forecasts saleable iron ore production by mine or asset. Production data is fed in from company reports, industry associations and data received from industry contacts. As mentioned above, the forecasts of production are composed of four elements: operating mines/assets, base case – projects, probable projects and possible projects. Historical and forecast mine production is allocated to the relevant exporting company. We make assumptions in terms of product split (sinter fines, lump, pellets, pellet feed) exported by each company.

The demand model uses forecasts of steel, hot metal and DRI, trade flows and ore consumption rates to estimate historical and forecast consumption of iron ore by country and by product.

This is a straightforward calculation, derived by multiplying a country’s hot metal or DRI production by the rate of iron ore consumption. For example:

This provides another way of cutting the data, looking at ore consumption by product.

Wood Mackenzie has developed proprietary models for forecasting steel demand, trade, supply, and prices. For key countries, we have developed bottom-up models. For the rest of the countries, we have developed country wise models which employs a top-down approach to forecasting steel demand, trade, and production.