China’s iron ore imports are projected to reach record levels in 2025, driven by increased supply from major producers and strategic stockpiling, even as the country’s troubled property sector continues to dampen domestic steel demand. Imports of the key steelmaking material are expected to rise by 10 to 40 million tons, reaching as much as 1.27 billion tons this year, according to a survey of seven analysts and two traders conducted by Reuters. This marks a notable increase from the estimated record volumes of 2024.
Growing supply from mining giants in Australia and Brazil will account for much of the import surge, as producers look to offload shipments ahead of the anticipated start of production at Guinea’s Simandou iron ore project later this year. Analysts expect the additional supply to drive iron ore prices lower, with forecasts ranging from $75 to $120 per ton in 2025, down from $88 to $144 per ton in 2024, according to consultancy SteelHome.
“Our base case assumes a moderate surplus in 2025, with prices holding at around $95 to $100 per ton,” said Myles Allsop, UBS’s head of EMEA mining research. “By 2026 and 2027, we see the surplus expanding further, likely pushing prices deeper into the cost curve.” 
China, the world’s largest steel producer, imported 1.124 billion tons of iron ore in the first 11 months of 2024, a 4.3% year-on-year increase, even as its crude steel production declined by 2.7% during the same period. Rising imports are inflating port stockpiles, which analysts forecast could reach as much as 170 million tons in 2025, up from 146.85 million tons as of December 27, according to data from consultancy Mysteel.
Supply Expansion from Australia and Brazil
Top producers Australia and Brazil are expected to increase exports to China, capitalizing on favorable market conditions. Australia is projected to add approximately 20 million tons of new supply in 2025, driven by ramped-up production at projects including Rio Tinto’s Western Range, Fortescue’s Iron Bridge, and Mineral Resources’ Onslow operation, analysts said.
Brazilian miner Vale is also set to maintain strong output, with production expected to range between 325 million and 335 million tons in 2025, slightly up from 328 million tons in 2024. The looming entry of Simandou’s high-grade iron ore into the market is pressuring established miners to maximize shipments before the supply landscape becomes more competitive.
Despite these supply-side pressures, a potential depreciation of the yuan and Beijing’s push to expand steel production from electric arc furnaces (EAF)—which predominantly use scrap steel instead of iron ore—could cap import growth, analysts cautioned. China aims to raise the share of EAF-based steel output to 15% by the end of 2025, up from about 11% currently, according to government targets.
Steel Demand Faces Structural Headwinds
China’s steel sector, which accounts for the bulk of iron ore consumption, remains weighed down by a struggling real estate market. The property sector, traditionally the largest driver of steel demand, has yet to recover despite Beijing’s rollout of stimulus measures, including interest rate cuts and efforts to ease developers’ financial constraints.
Steel demand is forecast to decline by 1.5% in 2025, following an estimated 4.4% drop in 2024, according to the state-backed China Metallurgical Industry Planning and Research Institute (MPI). While demand from second-tier sectors like automobile manufacturing and white goods production has shown resilience, analysts argue this is insufficient to offset losses from the construction downturn.
“The manufacturing sector and steel exports are providing some support, but it’s not enough to make up for the structural challenges in real estate,” said Tomas Gutierrez, head of data at consultancy Kallanish Commodities.
Outlook for Iron Ore Markets
The divergence between rising imports and faltering domestic steel demand highlights China’s strategy of stockpiling iron ore to ensure long-term supply stability. Traders appear confident that demand for the commodity will remain resilient despite current headwinds.
China’s dominant position as the largest consumer of seaborne iron ore, accounting for over two-thirds of global trade, underpins this optimism. However, the market faces a delicate balancing act in 2025, with surging supply, weaker steel demand, and evolving production technologies creating significant uncertainty.
For now, analysts expect the surplus to keep iron ore prices under pressure, potentially forcing high-cost producers to scale back. “We see the market transitioning to a new phase in 2025, with falling prices testing the profitability of marginal producers,” said UBS’s Allsop.
