According to Signal Group, iron ore flows increased in 2025, yet the outlook for 2026 points to mounting pressure from weak steel demand in China and elevated port inventories, raising questions about how long stockpiling can continue.
Global seaborne iron ore flows reached 1.7 billion tonnes in 2025, representing a 3% increase year-on-year.
Signal Group reports the increase was driven by China, where imports rose 4% (about 52 million tonnes), and India, where flows surged 72%, albeit from a smaller base, adding just under 6 million tonnes.
Australia and Brazil remained the dominant exporters, together accounting for more than 78% of global seaborne iron ore. Meanwhile, Canada ranked a distant third, supplying less than 4%.
Despite stronger trade volumes, downstream indicators remain weak. Data from the World Steel Association shows global crude steel production down 2% in the first 11 months of 2025.
Steel output in China and Japan – the two largest iron ore importers – both fell 4%, highlighting a growing disconnect between iron ore imports and steel demand.
In China, declining steel production, coupled with higher imports, has pushed iron ore port stocks to multi-year highs.
While stockpiling ahead of the Chinese New Year is typical, inventories have been rising steadily since summer. Downstream steel demand has underperformed, prompting mills to cut output, while government efforts to curb overcapacity and the impact of trade barriers are expected to weigh further on production in 2026.
In India, steel production grew by more than 10% in the first 11 months of 2025, supporting higher iron ore imports.
Government policy continues to back domestic producers, with plans to lift steelmaking capacity by 50% to 300 million tonnes by 2030. Even so, India’s growth is unlikely to materially offset weakness in China, which still absorbs more than 75% of seaborne iron ore flows.
On the supply side, Guinea’s Simandou Project offers longer term implications rather than near-term relief. The mine is expected to export up to 120 million tonnes a year at full capacity, but ramp-up is not anticipated until late 2028, with initial output reaching about 60 million tonnes after 30 months.
Signal Group says the longer haul from Guinea to China – more than double the distance from Australia – could support capesize utilisation, even if overall demand softens.
For 2026, weaker Chinese steel production remains the dominant factor shaping iron ore demand.
While India and new supply routes provide some support, the balance of risk suggests rising stocks in China will continue to weigh on the market, with freight impacts increasingly driven by shifts in trade routes rather than volume growth alone.
This content was created with AI assistance and human editing.
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