Global race as market for high-grade iron ore grows in Commodity News 20/03/2026 With global demand for high-grade iron ores increasing as the steel sector decarbonises, a looming supply deficit creates significant opportunities for new suppliers – including Australia – provided they can act quickly. A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) examines the accelerating shift in the global market for high-grade iron ore as the steel industry transitions to low-emissions production. At the core of that transition is direct reduction (DR) technology, which requires iron ore feedstock of a higher quality with lower impurities. The report, entitled Global high-grade iron ore market is set to grow, shows that established iron ore suppliers in Canada, Brazil, and the Nordic region, along with emerging players in regions such as Africa and the Middle East, are already leading the shift to production of DR-grade feedstock. However, demand is growing at such a rate that a global supply deficit is expected in the coming years. According to Soroush Basirat, Energy Finance Analyst, Global Steel at IEEFA and author of the report, this creates significant opportunities for other contenders to enter the market. Basirat says: “Globally we’re seeing an increasing number of new direct reduction plants coming online that do not have access to DR-grade feedstock domestically. This will increasingly place pressure on the global seaborne market for DR-grade ore. Multiple forecasts suggest that a supply deficit is likely. For new suppliers, the high-grade iron ore market represents a distinct emerging opportunity that should not be overlooked.” Iron ore is Australia’s largest export. However, its production is dominated lower-grade ore suitable for traditional blast furnace-based steelmaking, the long-term outlook for which is declining – in particular as its key export market – China – moves toward low-emission iron production via DR. Basirat argues that the global shift toward DR presents a vital opportunity for Australian iron producers to diversify their demand base: “Without participating in the supply of higher-grade materials, Australia risks losing strategic relevance in a market increasingly shaped by decarbonisation and demand for premium iron ore products.” While Australia does not have the highest-quality iron ore that is already in production and readily available for this transition, it holds significant potential in magnetite mining, which is crucial to producing high-grade ore. Establishing new production capacity based on magnetite deposits will involve long development timelines, but with most forecasts pointing to supply deficits emerging after 2030, there is a narrow window of opportunity for Australia to position itself to support decarbonisation initiatives among its traditional trading partners in Asia. Basirat adds: “Decisive and timely action will be critical for Australia to keep pace with global developments in low-emissions ironmaking. While production from new deposits may still be a decade away, this timing could align well with the expected wave of new DRI projects at the global scale. With stronger support from governments, investors, and iron and steel producers, Australia could have the potential to compete.” To coincide with the publication of the report, IEEFA has released an update of its Australian Green Iron Tracker. The Tracker is an interactive dataset that allows users to visuali