(Jan 19): Iron ore sank for a fifth day as Beijing confirmed a big drop in steel production and the inaugural cargo from a major new mine in Africa arrived in China, raising concerns about oversupply in the seaborne market.
Futures fell toward US$104 a tonne, set for the longest run of losses since November. Steel production in China — the top iron ore importer — shrank by more than 4% to about 961 million tonnes in 2025, according to official figures on Monday (Jan 19). That’s the lowest annual total since 2018.
On supplies, the first shipment of ore from Guinea’s giant Simandou mine arrived in eastern China on Saturday after a 46-day voyage on the Winning Youth, China’s Baowu Steel Group Co said on its official WeChat account. A second cargo left the African nation at the end of last year.
Simandou is expected to reach a total annual output of 120 million tonnes a year once fully ramped up, bolstering volumes available to steelmakers. Rio Tinto Group, which owns a stake, previously said it plans to step up operations over 30 months. Total world trade in iron ore is projected at 1.77 billion tonnes this year, according to an Australian government estimate.
Iron ore futures managed to hold their ground in 2025 — gaining about 4% — but a shifting seaborne market balance may pressure them lower in the coming quarters. Although restocking and a pricing dispute between state buyer China Mineral Resources Group Co and BHP Group have helped to keep prices elevated, there are now signs of loosening conditions, including port holdings.
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Inventories of the steel-making staple at China’s ports have expanded for the past seven weeks to 155.4 million tonnes, the highest level since April 2022, according to Shanghai SteelHome E-Commerce Co. The latest surge followed record imports of the commodity last month, even as steel output slowed.
“Chinese iron ore port inventory is set to balloon further,” said Robert Rennie, head of commodity research at Westpac Banking Corp. That — together with record imports to China — is “bad news for iron ore,” he added.
Futures fell as much as 2.3% to US$103.95 a tonne and traded at US$104.80 at 11.57am local time while contracts in Dalian dropped 2.5% to 792 yuan a tonne. Steel was also lower in Shanghai.
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Further insight into market conditions will come this week from some of the world’s leading iron ore producers, with BHP, Rio Tinto and Fortescue Ltd due to report operational performances.
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