I. Supply-Demand Pattern Shift Puts Iron Ore Prices on a Downtrend
In 2021, driven by inflation expectations from global quantitative easing, frequent supply-side disruptions in Brazil and Australia, resilient demand in China, and strong speculative sentiment, iron ore prices hit a record high of $219.77/mt in July that year, with Platts’ annual average price as high as $160/mt; they then entered a prolonged downtrend. In 2025, the annual average iron ore price was $102, down about 36% from the 2021 average.
Source: SMM
Iron ore prices have continued to fall in recent years, mainly due to the global project investment boom spurred by high prices before 2021. After 2024, multiple large iron ore projects worldwide entered a concentrated commissioning phase, and the market’s supply-demand pattern shifted from tight to loose, with the supply-demand gap widening from -12 million mt to 46 million mt.Meanwhile, China has implemented crude steel production cuts since 2022, significantly curbing iron ore demand. Coupled with persistent weakness in real estate, an overall downturn in the steel industry, and an overseas economic slowdown, among other factors, iron ore demand declined markedly. Entering 2025, a rebound in China’s steel exports drove iron ore demand to increase slightly, while capacity in emerging steel-producing countries such as Southeast Asia was gradually released, narrowing the supply-demand gap somewhat. Over the long term, however, iron ore supply is still on a growth trend, market expectations remain bearish, and prices are pressured to set new lows repeatedly.
Source: SMM (the forecast assumes an extreme balance under normal commissioning of new mines and no voluntary production cuts by mines)
II. Mine Costs Form a Solid Bottom Support for Iron Ore Prices
From the global iron ore cost curve, about 90% of global mine cash cost is no higher than $85/mt, and about 93.8% is no higher than $90/mt.International mining giants represented by FMG, BHP, Rio Tinto, and Vale have costs far below those in China and other non-mainstream countries, forming the main body on the left side of the cost curve in the chart—low and relatively flat—which explains their strong cost competitiveness and earnings resilience in the global market.
At present, the $85-90 cost line is the lifeline for the vast majority of mines; once prices remain below this range for an extended period, high-cost capacity will be forced to exit, thereby supporting prices.
China’s iron ore minesdue to low raw ore grade and high underground mining costs, among other reasons, currently have a nationwide per-mt processing cost of about 595 yuan/mt, equivalent to around $85. Its costs have long been at the high end globally, serving as the "anchor point" and "ceiling" of the cost curve. The high cost and low production of China's domestic iron ore mines have led the steel industry to heavily rely on imports for raw materials, and fluctuations in international ore prices directly impact the profit stability of the domestic steel industry. Therefore, promoting domestic resource supply, investing in low-cost overseas resources, and developing steel scrap recycling are crucial for the strategic security of China's steel industry.
Data source: SMM
III. The global iron ore supply has long been characterized by a landscape dominated by the "Big Four" mines, supplemented by "non-mainstream" mines.
Currently, the iron ore production industry is highly concentrated, primarily following a pattern dominated by the "Big Four" mines, supplemented by "non-mainstream" mines.Australia and Brazilhave long contributedover half of the global iron ore production. Australia, leveraging advantages such as high resource concentration, low mining costs,and stable supply, firmly holds its position as the world's largest producer and exporter; whileBrazil is renowned for its high-grade oreand is the world's second-largest iron ore exporter.
Data source: SMM
The "Big Four" mines, consisting of Rio Tinto, BHP, FMG, and Vale,have long dominated global iron ore supply, accounting for approximately 70% of global production.
Data source: SMM
The Rise of Emerging MinesPromoting the Multipolar Development of Global Iron Ore
In recent years,Indiahas actively promoted domestic mining development, leading to a significant increase in production;since 2023, its iron ore production has surpassed that of China,and it shows a continuous expansion trend, maintainingan annual growth rate of 7%,gradually becoming a new force in regional supply growth. Emerging enterprises such as India's National Mineral Development Corporation (NMDC) and South Africa's Anglo American are gradually expanding capacity, enhancing their influence in the international market. Meanwhile,countries such as Russia, Kazakhstan, Iran, and regions in Africaare also actively developing domestic iron ore resources, seeking to increase their voice in regional markets,driving the global iron ore supply landscape from high concentration towards gradual multipolar development.
Data source: SMM
IV. Australia Firmly Holds the Top Spot, India Becomes a New Growth Engine
From the perspective of major producing countries, Australia still firmly ranks first globally, with iron ore production of approximately 900 million mt in 2025, accounting for one-third of the global total,and maintaining a stable annual growth rate of about 2%.Brazil ranks second; after the 2019 dam collapse, production once fell sharply. Although it has recovered somewhat over the past two years, the increase has been relatively limited. China’s production scale is relatively large, but due to frequent safety incidents and the continued impact of the environmental protection-driven production restriction policy, production has not increased but instead declined in recent years. By contrast, India, as an emerging producer, has seen production rise steadily over the past decade, and is expected to post an increase of about 7% by 2030.
Source: SMM
V Over the next three years, the world will usher in a new peak in mine commissioning
In addition to supply from existing mines, there are currently multiple large-scale iron ore projects under construction worldwide, with the number of mines expected to be commissioned in 2026 at six, mainly located in Africa and Brazil. Representative projects include Vale’s northern expansion “S11D +20mtpa,” the northern block of Guinea’s Simandou iron ore project, and the Nimba iron ore project. 2026 will be the year with the most concentrated new supply over the next three years. With the northern block of Simandou officially commencing production, the overall capacity ceiling of the mining area will, with capacity ramp-up, rise to 120 million mt, becoming the core incremental source of global iron ore supply over the next five years. From 2027 to 2028, projects expected to commence production will mainly come from China, including the Xi’an Mountain iron ore mine and the Honggenan iron ore mine, adding about 25 million mt of iron ore supply to the domestic market. Overall, as emerging producers continue to release capacity, and traditional suppliers such as Australia and Brazil consolidate their export advantages through expansion projects, the global iron ore supply structure will become more diversified. A new cycle of capacity release has gradually begun, and the loose supply landscape is expected to continue deepening over the next several years.
Source: SMM
Simandou Project Commissioning Reshaping the Global Iron Ore Supply Landscape
Among the many new projects, Africa’s Simandou iron ore is particularly noteworthy. The mine is expected to reach annual capacity of 120 million mt, and the ore’s average grade exceeds 65%, providing the market with a high-grade, high-quality option beyond Australia and Brazil, and becoming an important variable in the recent contest over the global iron ore supply landscape.
In terms of project progress, the Simandou iron ore project has entered a substantive shipment phase; as logistics corridors are gradually opened up, the mining area’s substantive impact on global supply will gradually become evident.
Source: SMM
Nearly 400 million mt of Capacity Release by 2030, Global Iron Ore Market Faces Impact
With the entry of emerging producers, iron ore supply is beginning to diversify. Projects led by Simandou iron ore are breaking the industry landscape and taking the iron ore market into a new stage. Looking ahead to the next five years, global iron ore capacity is expected to see a wave of concentrated releases, with incremental supply mainly coming from two major regions: Africa and Australia. Leveraging the development of new high-grade mines such as Simandou, Africa is reshaping the global supply landscape; meanwhile, Australia, relying on its existing capacity base and ongoing expansion projects, is further consolidating its export-dominant position. Overall, the global iron ore supply landscape is evolving toward greater diversification and a looser market.
Source: SMM
VI Simandou High-Quality Iron Ore Enters the Market; Global Iron Ore Enters an Era of “Quality Upgrading”
As some older mines gradually enter a period of resource depletion, coupled with the fact that many newly commissioned projects are dominated by mid- to low-grade ore, the average global iron ore grade shows a downward trend from 2025 to 2026. However, as high-grade mines such as Simandou are commissioned one after another, the share of high-grade ore supply is expected to increase, and is projected to drive a rebound in the overall global iron ore grade in 2027.
Source: SMM
VII “Green Steel” Reshapes the Global Crude Steel Production Landscape
From a policy perspective, the low-carbon transition represented by “green steel” is profoundly reshaping the global crude steel production landscape. Whether in China or Europe, carbon neutrality has become the core theme for the future development of the steel industry. Therefore, whether it is China’s ongoing capacity replacement policy or the EU’s Carbon Border Adjustment Mechanism (CBAM) that is about to be fully implemented, both clearly indicate that the global steel industry is accelerating its transition toward low-carbon and green development. Achieving carbon neutrality across the entire industry chain is no longer an isolated task for a single link, but must rely on close upstream-downstream coordination and deep integration of technological pathways.
Source: SMM
Technology Reshaping: Green Iron Supply + Green Production Demand
Against the broader backdrop of carbon neutrality, merely maintaining the current supply-demand structure dominated by iron ore can no longer meet future low-carbon requirements. The deeper need of industry transformation lies in reconstructing metallurgical processes: resource-rich countries—such as Australia and Brazil, traditional major iron ore exporters—need to fully leverage their renewable energy endowments and mineral advantages, shifting from simply exporting iron ore to producing high-grade, low-carbon-footprint direct reduced iron (DRI) or hot briquetted iron (HBI) and other high value-added intermediate products. By shipping this clean-energy-driven “green DRI” to steel consumption hubs and integrating it with local green electric arc furnace (EAF) processes, it can effectively replace the traditional “blast furnace–converter” long process, thereby substantially reducing carbon emissions at the source. This multinational collaborative model of “high-quality resources + green energy + short-process” is not only a critical measure to address trade barriers such as the Carbon Border Adjustment Mechanism, but also an essential pathway to build a new global green steel supply chain and drive deep decarbonization across the industry.
Data source: SMM
Rising Share of Electric-Furnace Steelmaking, Stronger Substitutability of Steel Scrap, Squeezing Iron Ore Demand
Driven by carbon-neutrality targets, the steel industry, as a major source of carbon emissions in the industrial sector, has drawn close attention for its emissions-reduction pathway. Among these, the traditional long-process route centered on “blast furnace–converter,” due to its heavy reliance on coke and iron ore, is regarded as a primary source of carbon emissions and has therefore become a key focus of regulation and retrofitting in various countries. By contrast, the short-process route represented by “steel scrap–electric furnace,” with a significantly lower carbon-emissions intensity, is being favoured by an increasing number of countries.This structural shift has driven the share of electric-furnace steelmaking in global crude steel production to continue rising.
Data source: SMM
From an economic perspective, the substitution relationship between steel scrap and pig iron is typically measured by the price spread. Generally, after factoring in steelmaking costs and losses,pig iron costs should be about 100-150 yuan/mt higher than steel scrap prices; this range is viewed as the cost-performance equilibrium band: if steel scrap prices are lower than pig iron costs by more than this threshold, steel scrap is more economical; otherwise, pig iron has a more pronounced advantage. In 2025, the average price spread between pig iron and steel scrap was 122 yuan/mt, lower than the 2024 average of 211.8 yuan/mt, and also largely within the cost-performance equilibrium band. By contrast, the 2024 spread was significantly above the upper limit of the equilibrium band, indicating that steel scrap offered a more prominent cost-performance advantage at that time.After the spread narrowed in 2025, the economic advantage of steel scrap weakened somewhat.
As a result, in the short term, there is limited room for China to increase the share of electric-furnace steelmaking; overall, it remains at a relatively low level and still lags far behind the global average.This also reflects that, at the current stage, cost factors still impose a substantive constraint on the choice of smelting process routes.
Data source: SMM
Taken together, the blast furnace–converter long-process route will remain the dominant model for global steel production over the next five years, but the shares of electric furnaces and steel scrap usage will increase year by year; in the long run, this trend will suppress iron ore demand, causing it to weaken gradually.
Data source: SMM
VIII Global Total Iron Ore Demand in 2030 to Be About 2.4 Billion mt, with Gradual Shifts in Global Flows
As China began encouraging domestic steel mills to develop overseas markets while adjusting the domestic industry chain’s transformation toward producing high value-added products needed by the manufacturing sector, global crude steel production began to rebound gradually.
Data Source: SMM
From the perspective of the global demand structure, although crude steel production outside China is entering a new round of development,with capacity expansion particularly notable in regions such as India and Southeast Asia,a considerable portion of the incremental increase comes from electric furnace processes, providing limited substantive boost to iron ore demand. Meanwhile, as the world’s largest iron ore consumer, China’s crude steel production has entered a downward trajectory, constituting the primary source of demand-side reductions. Overall, overseas increments are unlikely to fully offset China’s reductions. It is expected that by 2030, total global iron ore demand will be approximately 2.4 billion mt, with overall growth trending toward a slowdown. Compared with the mild growth on the demand side, the supply side remains in a phase of continuous expansion.The oversupply landscape will become an important factor that suppresses ore prices over the long term.
Data Source: SMM
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Data Source Statement: Except for publicly available information, all other data are processed and derived by SMM based on publicly available information, market communication, and SMM’s internal database models, for reference only and not constituting decision-making advice.
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