By Ulf Bergman
After another year of growth in 2025, global seaborne iron ore exports maintained positive momentum in the first half of this year, although uncertainties emerged as the year progressed. Meanwhile, iron ore prices have seen some fluctuations, but they have stayed within typical levels and a narrow range.
In addition to the modest growth, the past six months have brought a novelty, as exports from Guinea’s Simandou mine have begun to reach the global marketplace. Still, the contribution from the West African country to the global aggregate supply was modest.
Iron Ore Price Volatility but Nothing Exceptional
Over the past six months, iron ore prices have fluctuated, but the magnitude has been far from exceptional compared with recent years. The August SGX Iron Ore IODEX futures have traded between 95 and 110 dollars per tonne during the first half of the year, ending June just shy of 99 dollars. After trending higher for much of the period from mid-February to mid-May, the contracts came under renewed pressure, shedding 10.3 per cent between mid-May and the end of June.
In the first half of the year, the market repriced the Simandou effect, turning it from a prospect into a current reality. Shipments from West Africa surpassed initial expectations but entered a global market already experiencing a supply surplus, as illustrated by Chinese port inventories reportedly at approximately 160 million tonnes. With no shipping disruptions from major Australian or Brazilian miners, global supplies are expected to stay strong. Demand faced challenges as Chinese domestic appetite for steel remained weak amid ongoing issues in the real estate sector, keeping rebar profit margins near decade lows. Nonetheless, hot metal production and occasional restocking supported prices at times and contributed to increased market volatility.
Rebar reflects the iron ore demand-side situation in microcosm. In early July, Shanghai futures continued to decline, dropping below CNY 3,060 per tonne, the lowest in eight months, as mill profits deteriorated, with only about half of surveyed mills profitable amid persistent weakness in the real estate sector. However, recent data delivered a slight uptick, sparking some optimism. Consequently, prices have risen toward CNY 3,080, supported by a 19 per cent year-on-year increase in new-home sales across ten major cities and a warehousing index that has returned to growth, providing tentative signs that demand may finally begin to recover after months of surplus.
Iron Ore Flows During the First Half of the Year
Global seaborne iron ore exports rose by 2.3 per cent in the first half of the year, compared with the same period in 2025, reaching nearly 852 million tonnes, according to Signal Ocean data. Although the year-on-year growth fell short of last year’s 3.6 per cent, a closer look at the data shows that the annual expansion in volumes was confined to the second half of the year. For the current year, export growth initially carried forward the momentum from the second half of last year, but over the past two months, volumes have been broadly in line with last year’s levels. Still, despite flat-ish volumes, shipments in June were the highest since December last year.
As highlighted above, the entry of Guinean iron ore into the global supply chain was a novelty for the market. However, the 6.7 million tonnes shipped accounted for less than one per cent of the aggregate flow over the past two quarters, but Guinea’s share is set to rise in the coming years. Among the major exporters, shipments from Australia rose by 3.4 per cent compared with the first half of 2025. Brazilian seaborne exports also recorded a year-on-year increase, albeit modest at 0.8 per cent. By contrast, shipments from the rest of the world faced headwinds and declined by 2.5 per cent during the period, nearly matching the decline in the first half of 2025.
Exports bound for China rose by 3.7 per cent over the past six months, outpacing overall growth and helping the world’s second-largest economy increase its share of global seaborne iron ore imports to 75 per cent. Still, the year-on-year growth for the first half was significantly lower than the nearly ten per cent recorded during the preceding six months.
Outlook for the Second Half of the Year
The recent uptick in Chinese steel rebar prices amid improving data may provide an early indication of what lies ahead for global seaborne iron ore volumes over the coming six months. However, it is important to treat the recent developments with caution and a healthy dose of scepticism, as there have been false dawns aplenty. There is also the loss of momentum for global seaborne volumes during the past two months to consider. That said, the seasonal effect of summer in the Northern Hemisphere is likely to account for some of the loss of momentum and should be reversed in August.
In recent years, iron ore exports have been higher during the second half of the year than during the first six months. Last year, aggregate volumes during the July to December period were eleven per cent higher than during the preceding six months. However, the year-on-year change for the first half had been marginally negative. Hence, a repeat of the strong growth may be unlikely. Still, a 4.6 per cent year-on-year increase in the first half of 2024 was followed by volumes four per cent higher in the second half. Seasonal patterns suggest that iron ore shipments will start to recover and trend somewhat higher from August onwards. The ample supplies should put further pressure on prices and suggest that seaborne volumes will be robust, as low prices will keep inventory building attractive for Chinese actors and fuel demand for seaborne transportation. Hence, as is often the case, what is bad for the miners, i.e., low prices, is not necessarily bad news for capesize shipowners.
Data source: Ocean Analytics