Global Seaborne Iron Ore Imports Surge, Driven by China Amid Uncertainty
In 2024, global seaborne iron ore imports saw a notable increase of 3.6% year-on-year, reaching 1.707 billion metric tons, according to data from Kpler commodity analysts cited by Reuters columnist Clyde Russell. While this growth indicates a positive trend for the global iron ore market, it is important to note that it was almost entirely driven by China, the world’s largest buyer of this essential steelmaking raw material.
China's iron ore imports rose by 4.9% year-on-year, reaching 1.274 billion metric tons in 2024. This surge comes despite projections that China's steel production may decline by the end of the year when compared to 2023. Steel production is expected to settle at around 1 billion metric tons, which is somewhat counterintuitive given the high volume of ore being imported.
Factors Behind China's Increased Iron Ore Imports
The increase in China's iron ore imports seems illogical at first glance, especially given the expected decline in steel production. However, several key factors may explain this anomaly. One of the primary drivers could be the lower price trend for iron ore during the year, which may have encouraged Chinese steel mills and traders to stock up on the material. The iron ore market saw a price peak on January 3, 2024, at $143.60 per ton, but prices fell significantly to $91.1 per ton by September 10. By the end of the year, prices had recovered to $103.61 per ton, but the overall drop of 28% prompted an increase in purchases, particularly in the latter half of the year.
Additionally, China's imports may have been influenced by the need to restore reserves, as well as the substitution of lower-quality domestic materials with higher-quality imported ore. Despite the expected drop in steel production, these factors played a crucial role in maintaining strong demand for iron ore from China.
Global Market Outlook: Impact of the Trump Administration and Global Uncertainty
As of January 8, 2025, the price of iron ore stood at $97.36 per ton. However, the future of the market remains clouded by significant uncertainty surrounding global policy developments, particularly the potential impact of the new Trump administration in the United States. The market is currently in a "wait-and-see" mode, as traders and industry leaders closely monitor the direction of policies that could affect global iron ore demand.
This uncertainty is also expected to affect iron ore demand outside of China. In 2024, imports in developed European countries declined to 85.12 million metric tons, down from 88.40 million metric tons in 2023, with the United Kingdom accounting for the bulk of the drop. Japan also experienced a reduction in iron ore imports. These declines in Europe and Japan offset growth from smaller buyers in regions such as the Middle East and North Africa.
Forecasts for 2025: Pressure on Prices
Looking ahead, the outlook for iron ore prices in 2025 remains under pressure, with ING forecasting that prices will average $95 per ton throughout the year. Several factors contribute to this forecast, including the expected low demand for steel, strong iron ore supply, and elevated port stocks of raw materials. These dynamics suggest that while iron ore prices may face downward pressure, the market is likely to experience more stability than significant volatility.
The demand for iron ore in 2025 will continue to be shaped by both global economic conditions and regional trends. While smaller buyers in regions like the Middle East and North Africa may continue to drive some growth, the general market remains vulnerable to broader shifts in industrial demand and political uncertainty, especially in key markets like China and Europe.
