China
The Chinese seaborne iron ore market has softened into early 2026, with sentiment turning more cautious as elevated portside inventories weigh on spot activity. While imports rose during the traditional pre-lunar new year restocking cycle, the build-up in port stocks has dampened near-term buying interest and restocking has largely been completed.
A key event to watch this year will be shipments of African iron ore to China. While the volumes will start small initially, they could rise substantially. Australia will remain the top supplier to China, but these new supply sources will shake the dominance Australia once enjoyed and provide China's buyers with more leverage against Australian sellers.
We estimate China imported 1,260mn t of iron ore in 2025, reaching a new high. But this momentum is expected to reverse in 2026 amid weak steel demand and lower steel production, with imports forecast to fall to 1,250mn t. In 2027, however, we expect a modest recovery to around 1,260mn t as the property market stabilises or bottoms out and steel demand begins to improve. There are both upside and downside risks to this forecast. The most volatile risk to the forecast is China's domestic iron ore industry. The government would like to increase production and reduce import dependency but production fell in 2025 to a reported 983.7mn t, down 5.6% from 1,041mn t in 2024. We expect the downward trend to continue this year with 2026 output forecast at 950mn t due to falling grades and competition from imports. With crude steel production remaining weak, domestic output will be the key indicator for iron ore prices this year.
Japan, South Korea, and Taiwan
Japanese iron ore imports declined through late 2025, reflecting continued contraction in domestic crude steel production and a cautious buying approach by mills. Iron ore imports edged down by 0.5pc in 2025 to 95.9mn t, driven by weaker purchases from Australia and Canada . December imports experienced a seasonal rebound but the broader trend points to cautious restocking and weak near-term demand expectations. Looking ahead, we forecast a slight decline in iron ore imports to 93mn t as Japan's market stabilises.
It should also be noted that Japanese producers are accelerating biocarbon initiatives from 2026 as part of their decarbonisation strategies. Aisin Takaoka is producing biocoke from palm kernel shells in Indonesia, while Idemitsu plans full scale shipments from its Vietnam facility, initially 120,000 t/yr with a long-term target of 3mn t/yr by the 2030s. Kobe Steel also plans to deploy black pellets developed by Mitsubishi Ube Cement in blast furnaces, with a joint venture targeted for 2026. These technologies could enable continued blast furnace operations at reduced carbon intensity during the transition toward DRI EAF routes, extending the relevance of traditional iron ore grades in the near to medium term.
South Korea's iron ore imports reflect the ongoing capacity rationalisation and a gradual shift toward EAF based steelmaking. A cumulative 12pc decline in crude steel production since 2020 has reduced aggregate iron ore demand, although inventory rebuilding during periods of anticipated production stabilisation has partially offset the pace of import contraction.
Iron ore imports fell to 4.35mn t in November 2025, the lowest monthly level since February 2017, underscoring the impact of structural production reductions. The stabilising of crude steel production should lead to a levelling of iron ore imports, which we forecast at 68mn t in 2026.
Taiwan's iron ore import requirements remain more resilient relative to regional peers, reflecting continued reliance on blast furnace operations despite subdued domestic steel production. But, imports were down 8.3pc year to date through mid-2025 compared with 2024 before recovering towards the end of the year.
The postponement of blast furnace to EAF conversion by Taiwan's largest producer highlights ongoing challenges related to scrap availability and conversion economics. As a result, iron ore import requirements are expected to plateau in the near term around 19mn t.
Europe
European Union imports of iron ore picked up in 2025 on the back of safeguard tariffs which improved crude steel production. Full year 2025 customs data are not yet available, but we estimate imports rose to around 109.4mn t in 2025, up from 108.8mn t a year prior.
The outlook for 2026 is slightly bearish though. While protectionist measures and CBAM will support the domestic steel industry, growth in production is expected to be modest amongst weak overall demand and pricing. Further, we forecast EAF production to grow this year while BOF will shrink as decarbonisation efforts continue to gain pace.
Scrap based EAF expansion offers a lower cost and faster to deploy option, though growth is constrained by scrap availability and quality limitations. Each tonne of steel shifted from blast furnace to scrap based EAF reduces iron ore demand by up to 1.5 tonnes, contributing to structural demand erosion.
Australia
After a soft November for exports, December monthly exports were the highest for the year at 86.8mn t as shipments to Northeast Asia improved. While this is partially due to typical end of year restocking, a large fall in Chinese domestic iron ore production led to a 9mn t increase in imports from November to December. Full year exports are estimated at 924mn t.
Heading into 2026 though, preliminary data shows iron ore exports of around 77mn t. This is up compared to January last year, mostly on more aggressive Chinese restocking, it is down from December 2025 levels. Contacts in China report that most restocking was completed by end January and we expect the seasonal decline in imports in February due to the lunar new year. March will see a rebound as restocking takes place, but we expect it to be a bit weaker this year than usual as sentiment in the steel market remains negative.
We forecast a slight rise in Australian exports for 2026 reaching 929mn t as newer mines continue to ramp up and new projects start (see table). There is likely more downside potential in this forecast than upside as the ramp-up of Simandou will provide competition to Australian producers. Initial volumes from the mine will be relatively small, compared to total seaborne trade, but if the mine is able to ramp-up more quickly it could add oversupply pressure to the market.
South Africa
South African iron ore exports had a strong showing in 2025 finishing the year at an estimated 65mn t, up from 61.2mn t in 2024 despite logistical issues and bottlenecks. Rail maintenance and two derailments in October constrained exports alongside a period of single loading due to a planned refurbishment of a stacker reclaimer and high winds that disrupted loadings. While these issues were resolved throughout the year, we expect logistical challenges to continue into 2026.
We forecast South African iron ore exports to fall slightly to 62mn t in 2026 due to on-going logistical issues but also increased competition from other producers in Africa, Brazil and Australia.
Brazil
Brazilian iron ore exports reached a record 416mn t in 2025 driven by the successes at Vale. Vale increased its iron ore production by 2.6pc on the year to 336mn t in 2025, the highest annual output since 2018 and surpassing its guidance set for the year at around 325-335mn t. The rise was driven by growth at, commissioning of a fourth processing line at the Brucutu operation, and continuing ramp up of Capanema in Minas Gerais. Output growth was further driven by Samarco's concentrator ramp-up and pellet plant expansion under the Vale–BHP joint venture.
Exports to China, which represented 60pc of total exports, grew by 6.5pc on the year to 295mn t as China seeks to diversify its iron ore supply. India also returned to taking Brazilian iron ore importing 6.3mn t in 2025 compared to a reported zero tonnes imported in 2024. India's growing appetite for iron ore presents an opportunity for Brazilian exporters to diversify their customer base.
Brazilian iron ore exports have stumbled at the start of the year compared to December shipments, but they are up about 6pc over January 2025. Exports typically fall during this period due to the rainy season though there have been some disruptions to supply. Vale halted operation at its Fabrica and Viga iron ore mines in Minas Gerais state since January 27 due to overflow at the reservoirs owing to heavy rains in the country. Another miner and steelmaker, CSN, also reported overflow at its Casa de Pedra mine at the end of the January. Vale's production guidance remains unchanged for the year, and we expect the company to compensate in upcoming months.
We forecast Brazilian iron ore exports to increase slightly to 418mn t this year with some downside risk due to market conditions and the aforementioned mine suspensions.
In further Vale news, the company revised its breakeven price from $90/t to $100/t due to high inflationary costs and held firm it's $100/t long-term iron ore price. Vale's iron ore guidance for 2026 is 335mn-345mn t, down from an earlier 340mn-360mn t, in response to softer demand and new supply entering the market. That said, the launch of EU's CBAM is a likely boon for the producer over the medium term.
India
India's iron ore market experienced several ups and downs since 2015 but has swung to a significant upside over 2025We estimate imports have more than doubled in 2025 to over 12mn t, though final data is not yet in. This is despite continued growth in domestic iron ore production, which we estimate reached 288mn t, and Indian exports of iron ore slowing through the year.
With supportive government policies, we do not see any signs of a slowdown in growing BOF crude steel production which we forecast to grow by 9.5mn t reaching 78.8mn t in 2026. To feed these blast furnaces, we forecast India's domestic iron ore production to reach 295mn t while imports remain flat. But this forecast is dependent on domestic miners achieving their plans and any shortfall would need to be made up by further imports.
