The seaborne iron ore market is well-supplied as major producers maintain steady output. Rio Tinto’s Q2 shipments of 82.5 million tons from Pilbara operations were in line with the company’s full-year guidance of 323-338 million tons. The Gudai-Darri mine ramp-up is proceeding according to plan, contributing incremental volume.
Vale’s production recovery continues. The Brazilian miner reported 82 million tons of output in Q2, up 3% year-over-year. The S11D expansion is operating at 95% of its 100-million-ton annual capacity. Vale’s full-year guidance remains at 325-335 million tons, unchanged.
BHP’s Western Australia Iron Ore operations reported flat production at 68 million tons. The company is investing in its South Flank mine to maintain production as older mines deplete. Fortescue reported 47 million tons of shipments, up 2% year-over-year, as its Iron Bridge magnetite project ramps up toward its 22-million-ton annual capacity.
Non-traditional suppliers are also adding volume. Simandou in Guinea remains on track for first production in 2028, but development is progressing. Indian exports have increased to 35 million tons annualized, taking advantage of the removal of export duties. These sources will add to seaborne supply in the coming years.
The iron ore supply picture is one of steady abundance. Major producers are running at capacity with no significant supply disruptions. This is a buyer’s market for long-term contracts. Negotiate volume flexibility into contracts — the ability to reduce volumes during Chinese property seasonality is more valuable than a small price discount.