Kumba Iron Ore has raised concerns over “growing evidence of a breakdown in the traditional world order” as the US administration ushers in an era of fragmented trade policy, threatening the outlook for commodity producers.
The mining giant, Africa’s biggest iron ore producer, listed geopolitical instability as the primary risk to its business in its latest annual report, saying a toxic cocktail of slow growth and geopolitical uncertainty is expected to pressure prices this year.
“As the US administration asserts its power through transactional economic pressure and military action, markets are faced with increasingly fractious trade policies and tariff volatility,” it said.
“Differences in monetary policy and concerns around sluggish economic growth, rising debt and potential asset bubbles — amplified by uncertainties around the effect of AI — are fuelling macroeconomic volatility and disrupting demand expectations for industrial commodities, including iron ore.“
The price of iron ore, which is used to make steel, is closely tied to the health of the global economy, whose outlook has been hurt by “significant disruption in traditional alliances, initiated by the US”, said Kumba chair Terence Goodlace.
Aside from tariffs and other hostile trade policy shifts, the US-Israel war on Iran has caused a sharp increase in the oil price and “could lead to material reductions in the global energy supply with resultant inflation and a reduced global GDP”, he said in his annual letter to shareholders.
This comes at a vulnerable time for iron ore miners, with global steel demand already under pressure from slow Chinese industrial output due to trade disruptions, US tariffs and sluggish domestic property and construction sectors in recent years.
China is by far the world’s biggest buyer of iron ore because of its dominance in global steel supply and its share of Kumba’s export sales rose to 56% in 2025.
“In the context of an increasingly uncertain geopolitical environment, global steel demand is expected to remain subdued into 2026, reflecting slower Chinese industrial output and trade-related disruptions, as well as increasing global supply,” said Goodlace.
As slow growth pressures demand, new supply from Kumba’s competitors makes the market outlook this year look even bleaker.
Rio Tinto’s Simandou mine, one of the world’s largest high-grade deposits, is expected to drive a surge in global supply after beginning initial shipments late last year. It is projected to bring about 15-million to 20-million tonnes of iron ore to the market this year — about half of Kumba’s total output in 2025.
Kumba said it expects prices to be supported at the marginal cost of production of about $90/tonne as supply expansion from major projects outstrips demand growth.
“With elevated port stocks, this will contribute toward surplus conditions, underpinning a modest downward trend in prices,” said the group.
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