Australia expects iron ore exports to peak and then decline due to weakening demand in China

Australia remains the world's largest holder of iron ore resources and the largest producer, exporting 923 million tons of iron ore in 2025, according to a quarterly forecast report from the Australian Ministry of Industry, Science and Resources.

Although export volumes are expected to increase in the near future, export earnings are projected to decline during the forecast period as prices decline. Exploration activity is expected to remain high as producers seek to replenish dwindling reserves.

The structure of global trade is expected to change

Global steel demand is projected to continue to grow gradually through 2031, mainly driven by India, other Asian countries, and the Middle East, while Chinese steel consumption and production are expected to decline over the same period. As a result, global iron ore trade is projected to remain broadly stable, although trade patterns are expected to change. China's iron ore imports are projected to decline by an average of 1.8 percent per year, while imports from India and other Asian countries are expected to rise. In terms of supply, Australia is expected to remain the largest exporter, although exports from Brazil and African producers, especially Guinea, are projected to grow steadily.

Global iron ore shipments are expected to grow as additional production is launched in Australia, Brazil, Canada, India and Africa. In Brazil, Vale expects iron ore production to reach 335-345 million tonnes in 2026, with exports projected to increase by 2031 due to expansion. Guinea's Simandou project, which began operations at the end of 2025, is expected to reach an annual capacity of 120 million tons by 2030, which will provide additional high-quality ore to the offshore market.

Demand in China will weaken as scrap usage increases

China's iron ore imports remained steady in the first quarter of 2026, despite a decline in steel production. Imports increased by 11.2 percent year-on-year, while steel production decreased by 4.2 percent. Imports from Australia rose 8.8 percent after restrictions on some BHP products were lifted following the signing of a new long-term sales agreement between BHP and China Mineral Resources Group (CMRG) in April 2026. However, in the March quarter, stocks in China's ports exceeded 160 million tons, reaching a five-year high.