China iron ore imports set to rise this year as steelmakers make up for declining grade

China’s iron ore imports are set to rise for a third consecutive year in 2026, as steelmakers buy more to compensate for declining iron content and as Guinea’s Simandou project boosts supply, analysts said.

The top iron ore consumer’s imports are likely to climb as much as 4% to a record of just above 1.3 billion metric tons, analysts said, helping prevent any oversupply-induced price drop.

The world’s second-largest economy is likely to bring in more of the key steelmaking ingredient even though crude steel output is set to decline for a third successive year due primarily to a protracted property market downturn.

“The import story right now is more supply- than demand-driven, largely via Simandou’s ramp-up and weaker domestic mining,” said Kpler lead analyst Sushmita Vazirani.

Supplier Rio Tinto reported second-quarter iron ore sales that beat the average analyst estimate, BHP logged record iron ore production in its financial year ended in June, and Vale recorded its largest second-quarter iron ore output since 2018.

The Simandou project in West Africa is likely to add roughly 18 million tons of iron ore to seaborne supply this year, and 45 million to 48 million tons next year, Macquarie analyst Florence Sun said.

China’s iron ore imports rose 6.3% in the first half of the year, elevating portside stocks which amounted to 156.6 million tons as of July 17, nearly 20% higher than a year earlier, showed data from consultancy Steelhome.

Contributing to the increase is an effort to offset a decline in iron content brought about partly by aging mines.

“Headline portside inventory can overstate the effective availability of iron units when viewed purely on a physical-ton basis rather than on a Fe-unit or value-in-use-adjusted basis,” said research director David Cachot at consultancy Wood Mackenzie.

The average iron content of stocks at Chinese ports was 60.2% over January-March versus 60.6% in 2023, Yilin Wang, an analyst at a think tank of state-owned China Mineral Resources Group, told a conference last month.

“The persistent decline in average shipped grade is the core driver of higher import tonnages despite weaker iron unit demand,” said Macquarie’s Sun.

Wood Mackenzie expects China’s crude steel output to slide 2.9% this year while Kpler has pegged the decline at 3.6%.

Iron ore prices are likely to trend lower accordingly, albeit at a slower pace than oversupply had previously led many to believe, analysts said.

Macquarie projects the annual average for the 62% Fe benchmark price at $103 a metric ton this year and $97 next year. Prices averaged $104 in the first half of 2026, showed data from Steelhome .