China, the world’s largest importer of iron ore, is expected to set a new record for its iron ore imports in 2025, despite experiencing a protracted downturn in steel demand. According to a survey of analysts and traders, China's iron ore imports could rise by 10 million to 40 million metric tons, reaching up to 1.27 billion metric tons, surpassing the anticipated record volumes of 2024. This growth is primarily driven by an increase in supply from major iron ore producers, including Australia and Brazil, which are eager to sell their ores ahead of the upcoming Simandou iron ore project’s production.
The Simandou project, located in Guinea, is set to flood the market with new iron ore supplies later in 2025, leading to further fluctuations in global iron ore prices. The price of iron ore is expected to drop to between US$75 and US$120 per metric ton in 2025, a decrease from the range of US$88 to US$144 per metric ton anticipated for 2024. Despite this price decline, analysts expect the supply surplus in 2025 to be moderate, with prices stabilizing between US$95-100 per metric ton. However, as the surplus expands in the following years (2026-2027), iron ore prices could experience a sharper decline.
The rise in iron ore imports is expected to significantly increase China's port stockpiles, which could reach up to 170 million metric tons in 2025. As of December 2024, China’s iron ore stockpiles have already risen by 28.3% compared to the previous year, totaling 146.85 million metric tons. This growing stockpile signals traders and suppliers' continued optimism regarding China's long-term demand for iron ore, even as the country faces a decline in its steel production.
China’s steel industry, which typically consumes the bulk of its iron ore imports, has shown signs of strain. The country's crude steel output dropped by 2.7% year-on-year in 2024, and steel demand is forecasted to fall by 1.5% in 2025 following an expected 4.4% decline in 2024. This downturn is mainly due to weakness in the property sector, which has traditionally been a major driver of steel demand. While the Chinese government has rolled out several stimulus measures to revive its economy, including boosting demand from automotive and white goods sectors, these efforts have not fully offset the adverse impact of the real estate slowdown.
The top iron ore producers, Australia and Brazil, are ramping up production to meet the growing demand. Australian supply is expected to increase by around 20 million metric tons in 2025, with projects like Rio Tinto’s Western Range and Fortescue’s Iron Bridge contributing to the growth. Brazil’s Vale, one of the world’s largest iron ore producers, plans to produce between 325 million and 335 million metric tons of iron ore in 2025, slightly down from 328 million metric tons in 2024.
Despite the potential challenges posed by factors like the depreciation of the yuan and China’s efforts to increase the share of steel production using electric arc furnaces, which rely on scrap material, iron ore imports are set to remain strong. Electric arc furnaces could reduce China’s iron ore consumption by replacing traditional methods of steelmaking, but the overall impact may not significantly reduce import volumes in 2025.
