MNI: China Iron Ore Imports Resilient Despite Weakening Demand

China’s iron ore imports are expected to remain near record highs in 2026 despite weaker steel demand, as the structural cost advantage of seaborne supply continues to displace higher-cost domestic production and offset slowing consumption, local analysts told MNI.

Although domestic iron ore consumption could fall by around 2% year-on-year amid continued weakness in the property sector, imports may still edge up from 2025’s record 1.26 billion tonnes, largely due to supply-side economics, said Zhuo Guiqiu, chief ferrous analyst at Jinrui Futures.

Lower-cost imported material will continue to crowd out domestic output, Zhuo said, adding that ample global supply will reinforce the trend. 

While official data showed China's imported ore grew 1.8% year-on-year last year, a recent survey indicated domestic output reached 275 million tonnes, down 3.26% from 2024. With seaborne supply expected to remain abundant as Chinese demand softens, elevated port inventories are likely to persist as a structural feature of the market, he added.

However, Wang Guoqing, head of analysis at Beijing-based research firm Lange Steel, said imports could decline by 1% to 2% in 2026 to roughly 1.23 billion to 1.25 billion tonnes, as demand conditions peak and policy constraints weigh on shipments.

The drop in new housing starts is expected to narrow to between 5% and 10% this year, reducing the drag on steel demand but making incremental growth in iron ore imports difficult, she said. The decline reflects a broader structural transition rather than a cliff-like contraction.

SOFTER DEMAND

China’s total steel demand is projected to fall about 1.6% in 2026, with the pace of contraction slowing from previous years, Zhuo said. Data from the China Iron and Steel Association showed apparent crude steel consumption stood at 829 million tonnes last year, down 7.1% year-on-year.

The country’s prolonged real estate destocking cycle remains unresolved, while steel intensity in infrastructure and manufacturing continues to weaken. Simultaneously, Chinese steel exports face mounting policy resistance both domestically and internationally, adding further pressure, he added.

Nevertheless, 2026 marks the first year of China’s 15th Five-Year Plan, which could bring stronger policy support for infrastructure and manufacturing investment, helping cushion the decline in demand.

Manufacturing—particularly high-end equipment sectors—will offer some underlying support. Steel demand from industries such as automobiles, shipbuilding and wind power is expected to remain resilient, though insufficient to offset weakness tied to real estate and traditional infrastructure fully, Wang said.

Exports are also likely to ease amid new export policies, EU carbon border measures and intensifying trade frictions, with shipments forecast to fall to around 100 million tonnes from last year’s record 119 million tonnes, she added.

Crude steel output is expected to decline 3.1% to about 930 million tonnes in 2026, slowing from last year’s 4.4% drop to 960 million tonnes, reflecting weak demand and government efforts to curb excessive competition, further reducing iron ore consumption.

Scrap substitution is also set to accelerate, Wang said, noting that greater use of electric arc furnace production and higher scrap consumption per tonne of steel could replace an estimated 15 million to 20 million tonnes of imported iron ore over the year.

PRICE OUTLOOK

On pricing, Zhuo forecast a volatile but broadly declining trend, with futures on the Dalian Commodity Exchange falling to around CNY680–700 per tonne from roughly CNY750 at the start of March.

Demand-side contraction is expected to weigh on prices, while global supply expansion—including output increases from the four major mining companies and additional volumes from the Simandou project—could create a surplus of about 40 million tonnes, reinforcing downward pressure, Wang said.