- Global iron ore surplus expected to widen significantly
- Domestic supply targeted to meet 30% of demand by 2030
Mysteel Global: China’s domestic iron ore concentrate production is set to rebound this year after a contraction in 2025, and continue increasing in the years ahead, according to Lei Pingxi, Chief Engineer of the Metallurgical Mines’ Association of China (MMAC).
Speaking on Thursday at the 20th International Iron Market Seminar in Qingdao, Shandong province, Lei revealed that China’s domestic concs production totalled 293.08 million tonnes in 2025, a decrease of 7.03 million tonnes or 2.3% on year. He attributed the decline primarily to reduced output from medium- and small-sized mines, which were more disrupted by environmental and safety inspections, weather issues, and longer maintenance periods caused by aging equipment over the past year.
This year, however, production is expected to recover significantly. Lei predicts that China’s concentrate output will increase by at least 8 million tonnes on year to reach 302 million tonnes which, if realized, would mark the highest level in a decade. The rebound will be driven by production recovery at older mines, particularly those in Hebei and Shanxi provinces, as well as the commissioning of new projects nationwide, he suggested.
Generally, global iron ore supply is set to expand further in 2026, largely fueled by the ramp-up of the Simandou project in Guinea, Lei pointed out. MMAC data indicates that worldwide output is expected to increase by 65 million tonnes or 2.5% on year to reach 2.68 billion tonnes. This will mark an acceleration from last year’s growth of 1.6%, with Africa accounting for 35% of the projected increase.
However, China’s appetite for iron ore is waning as the world’s largest consumer of the ore faces slowing steel consumption. The country’s crude steel output this year is forecast to fall by 14.81 million tonnes or 1.5% from 2025, landing at 946 million tonnes. Consequently, the global iron ore surplus is expected to widen by 30-35 million tonnes in 2026 compared to the previous year, exerting downward pressure on prices, Lei said.
Due to the persistent oversupply, iron ore prices in China are projected to trend downward throughout this year, despite the recent rally driven by geopolitical tensions in the Middle East, Lei pointed out. He forecast that the average price for 62% Fe Australian iron ore fines will settle at $95/dmt CFR Qingdao for the full 2026, a decline of $7/dmt from the 2025 average of $102/dmt.
Looking further ahead to China’s 15th Five-Year Plan period (2026-2030), Lei estimated that China’s iron ore consumption will continue its structural decline in tandem with falling crude steel output. The world’s largest iron ore importer also has plans to enhance its supply chain security by boosting self-sufficiency in iron ore, Lei noted.
By 2030, China targets a 50-million-tonne/year increase in its 62% Fe iron ore concentrate output, aiming for a total of 350 million t/y, according to Lei. This would enable domestic iron ore supply to meet 30% of the country’s demand, with a further 20% covered by equity ore from overseas investments, he added.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
Leave a Reply