China to set record for iron ore imports in 2025 amid decline in steel output

Iron ore imports are likely to exceed their historic high, while steel production will fall below 1 billion tons

In 2025, China may simultaneously record iron ore imports and the lowest steel production volumes in six years. Despite the fact that the country’s metallurgical plants are cutting production due to weak demand and low profitability, purchases of iron ore continue to grow, creating conflicting trends in the market, Reuters reports.

In October, the country produced 72 million tons of steel, which is 2% less than in September and 12.1% less than in October last year. In January-October, the figure was 817.87 million tons (-3.9% year-on-year). To reach the 1 billion ton mark, China would need to produce 91 million tons in November and December, but analysts consider a level of up to 75 million tons per month to be more realistic. Thus, the annual figure could be around 970 million tons, the lowest since 2019.

At the same time, iron ore imports are showing the opposite trend. In January-October, China imported 1.03 billion tons of iron ore. If deliveries exceed 210 million tons in the last two months of the year, imports will set a new historical high, exceeding last year’s 1.24 billion tons. DBX Commodities analysts estimate November imports at 116.5 million tons, while Kpler forecasts 120.6 million tons.

One of the fundamental factors driving import growth is the replenishment of stocks. According to SteelHome estimates, port stocks have risen for eight consecutive weeks and reached 139.6 million tons. This is 7.3% more than the August low, although still below last year’s figures. At the same time, prices remain relatively stable. Ore futures in Singapore are trading in a narrow range of $100-108/t.

However, weak fundamentals suggest that market optimism is the main driver of this import growth. An interview with Finance Minister Lan Fuan, in which he promised to strengthen fiscal stimulus measures – from budget redistribution to an increase in government bonds – only fueled expectations that economic stimulus measures would eventually revive demand.

As reported by GMK Center, Chinese steel companies reduced steel production by 1.7% year-on-year in 2024, producing 1.005 billion tons. This is the lowest figure in the last five years. Experts note that 2024 is likely to be the last year when steel production in China exceeded 1 billion tons.