Global iron ore prices have dipped below the critical $100 per tonne mark for the first time in months, as a combination of new trade tariffs, weak Chinese demand and mounting global economic uncertainty weigh on the market.
This is according to the latest Iron Ore Commodity Briefing Service (CBS) report, titled “Prices dip on tariff hikes, demand concerns,” released by S&P Global.
The report paints a cautious picture of the short- to medium-term iron ore landscape, warning that while some support may emerge later in the year, key market risks remain firmly tilted to the downside.
“The softening in prices reflects both structural and short-term factors — from China’s sluggish steel demand to growing trade tension with Western economies,” the report stated.
One of the most significant developments weighing on iron ore prices is the implementation of new tariffs on Chinese steel by the US and the EU. These measures, aimed at protecting domestic industries from what Western officials have described as “unfairly subsidised” Chinese exports, are already rippling through the supply chain. Chinese mills, facing reduced export competitiveness and tightening margins, have cut back on steel production, reducing demand for iron ore imports in the process.
As the world’s largest consumer of iron ore, China’s domestic dynamics remain the most significant bellwether for global prices. The report shows that Chinese steel production has declined in recent weeks, driven by weak demand in construction and manufacturing. Real-estate investment continues to underperform, with new project starts lower than those of last year. High steel inventories and softer downstream activity have prompted blast furnace operators to reduce run rates or delay procurement of new ore shipments.
Interestingly, according to the report, some mills are opting for lower-grade ore to save costs, leading to a widening gap in price differentials. Premium ores such as Brazilian fines and pellet feeds have come under pressure, while demand for low-grade Australian ore has held up comparatively better.
Despite falling prices, global supply remains relatively stable. Major producers including Rio Tinto, BHP, Fortescue Metals, and Brazil’s Vale have maintained export volumes. However, the margin environment is tightening. Vale’s production recovery remains uneven, with logistics and operational issues still affecting its 2025 output targets.
In SA, Kumba Iron Ore, a significant producer and exporter of, produced and sold 9-million tonnes of iron ore in the first quarter of 2025, according to the company’s production and sales report for the first quarter to end-March.
The company achieved an average realised price 11% above benchmark prices. Kumba’s production and sales performance is influenced by rail performance in the country, with a 5% uplift in Transnet’s rail performance supporting a 6% increase in sales volumes.
The S&P report notes that China’s gradual transition toward Electric Arc Furnaces (EAF) — which rely more on scrap than iron ore — is starting to bite into primary ore demand. While still in its early stages, this trend poses long-term risks for ore producers.
According to the report, the global iron ore market is clouded by significant downside risks, including China’s fragile property market, potential escalation in global trade disputes and faster-than-expected uptake of scrap-based steelmaking. The market remains highly sensitive to policy shifts and sentiment, and volatility is expected to persist.
As a significant exporter of high-grade iron ore, SA faces increased competition in a price-sensitive market. Logistical constraints, such as rail inefficiencies and port backlogs, remain a key challenge for SA miners trying to capitalise on any potential price recovery. Additionally, given that China remains SA’s largest trading partner for iron ore, any further softening in Chinese demand — or changes in global trade policies — could affect local mining revenue and operational health.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.