Iron ore supply from major miners is at record levels. Vale is ramping production to 330 million tonnes in 2026, up 3% from 2025, after resolving regulatory issues at its S11D complex. Rio Tinto and BHP are shipping at full capacity from their Pilbara operations.
Global seaborne supply is projected to reach 1.55 billion tonnes in 2026, exceeding demand growth that is expected to be only ~1.5%. The market is structurally oversupplied, which caps the upside for prices in the absence of a major supply disruption.
Simandou in Guinea is beginning to add to seaborne supply, with initial production expected to reach 30 million tonnes by late 2026 and ramping to 120 million tonnes by 2028. This new supply source will add to the surplus over the medium term.
The supply surplus is most visible in Chinese port inventories, which stand at 145 million tonnes, well above the five-year average. Steel mills are comfortable maintaining low days-of-coverage because supply is abundant and reliable.
Iron ore buyers have the upper hand. Abundant supply from three major producers plus Simandou's looming ramp keeps the market well-supplied. Negotiate from strength for long-term contracts. Avoid locking in volumes above $110/t for 2027 delivery.