06/02/2025 02:14:09 ET|Feature
AuthorClement Choo<“>.>|EN
Iron
Iron ore
Steel
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* Simandou launch increases global iron ore surplus
* Tariffs impact steel demand, China reassesses economy
* Decarbonization slows, EAF transition faces challenges
* India remains exporter, imports grow by decade-end

Several key insights emerged from the Singapore Iron Ore Forum (SIOF) 2025, held on May 28 during the broader SGX Commodities-organized Singapore International Ferrous Week (SIFW), which ran from May 26 to May 30. Here are seven notable takeaways.

Seaborne trade challenges

Participants at SIOF 2025 showed strong interest in Rio Tinto Group’s Simandou iron ore project in Guinea. Many believed the mine would exert downward pressure on global iron ore prices.
Mark Ferguson, director of metals & mining research at S&P Global Commodity Insights, said defining prices 10 years out will be challenging. He placed average spot prices at $97-$97.50/dmt in 2025 but noted a potential deficit in the early 2030s could push prices back toward $100/mt.
Mengtian Jiang, chief ferrous metal analyst at Horizon Insights, projected a 150 million dmt increment in the second half of 2025 compared to 2024.
Market expectations remain pessimistic due to obviously, Simandou on [the] supply side, said Robin Wang of Levmet’s dry bulk and metals trading section.
Ferguson noted that Brazil’s iron ore exports, forecast to exceed 400 million mt by 2026, are expected to continue putting downward pressure on the market. Simandou’s launch in late 2025 will likely increase the seaborne iron ore trade surplus.
In Australia, we expect exports to plateau in [the] not-too-distant future … Brazil is a different story, Ferguson said, estimating peak capacity in 2029. We could see deficits emerging in the early 2030s, which should support iron ore prices returning toward $100.

Trading tensions

Amid tariff tensions between China and the US, Mengtian Jiang noted that while China’s steel exports were strong in Q1 and Q2 of 2025, tariffs will have a negative impact on overall demand.
We have to wait a little bit longer to see what that 90-day pause is going to actually mean — if many of these countries will negotiate agreements and how that will impact steel, Ferguson said, referring to reciprocal tariffs announced by US President Donald Trump in April, delayed until July 8.
Ferrous has been relatively exempt from some of the geopolitical headlines. Of course, tariffs and antidumping on steel have drawn attention, but fundamentals remain largely unaffected, said Eric Bretting, head of ferrous trading at Macquarie Group.

Decarbonization updates

The global steel industry continues to face carbon-related challenges, said William Chin, managing director of commodities at SGX Group. The transition to low-carbon steel is gaining momentum, with higher grades of iron ore and direct reduced iron technologies playing a critical role in reshaping the industry’s future.
Aurelia Waltham, commodities strategist at Goldman Sachs Global Investment Research, noted the green steel transition has slowed … people are delaying it amid a weaker global market. She added that many existing blast furnaces are nearing the end of their life anyway, and Europe is unlikely to invest in new ones.
Electric arc furnaces are expensive, and it would be hard to transition at a fast pace without worsening your overcapacity and oversupply, because even though in theory, it should be a capacity swap, Aurelia said, referring to when an EAF is built, a blast furnace is shut down.
If you look across other sectors outside of steel that have done that capacity swap in the past, it doesn’t work, you don’t actually end up closing all of that capacity. A lot of it stays there.

A matter of grades

Steel margins are dictating the fundamentals and the compression of iron ore values, according to Vera Blei, head of market reporting & trading services at S&P Global Commodity Insights.
Chinese steelmakers faced compressed margins, so there’s been sort of a real flight to lower-grade material to compensate for that, Vera said.
As a consequence, premiums for high-grade iron ore have come under pressure while some lower-grade material is coming up, Vera said, narrowing the price spread between 62%-65% Fe iron ore and 58%-62% Fe iron ore.
William Chin said SGX is consulting with Platts, looking at possible updates to the IODEX (Iron ore index) benchmark as the iron content in the medium-grade fines continues to evolve in the spot market.
There’s been a bit of softening from a market perspective for high-grade iron ore, but we haven’t seen that much of a decrease in demand, François Lavoie, senior vice-president, sales of technical marketing and product development at Champion Iron.

India’s status

India is seeing some demand for iron ore pellets, said Swapnil Patil, head of iron ore and sponge iron trading at Tata International. But our view is, it will take some time for India to become a net importer.
India has about 300 million mt of iron ore capacity, and two state-owned producers are planning to add 50 million mt each by 2030 to meet the government’s crude steel output target of 300 million mt/year by 2030, Patil said.
Dave Tan, regional sales manager (MENA) at Anglo American, agreed, saying India will remain a net exporter of iron ore for a time, until China decarbonizes more and shifts toward high-grade demand, forcing India to consume more of its lower grades domestically.
India’s iron ore imports are expected to grow by the end of the decade, offsetting a slowdown in China’s imports.

DRI updates

Iron ore is a vital input for manufacturing DRI, which, according to Dave Tan, should reach 46 million mt by 2030 in the form of DR-grade pellets.
As the steel industry decarbonizes, DR pellets will likely face long-term shortages, Dave said. While Europe’s decarbonization efforts have slowed, Dave said it is still too early to tell whether it will switch more to either DRI or EAF. However, the region will most likely use more high-grade iron ores.

China plays by ear

Amid the varied takeaways, China remained a focal point for participants at SIOF 2025.
S&P Global Ratings Economics Group viewed the impacts of tariffs globally, And clearly, they foresee tariffs having a net negative impact on global GDP, particularly near-term impacts in the US and China, Mark Ferguson said.
Steel production cuts in China are likely to be spearheaded by domestic steel mills rather than by government-mandated orders, and most participants expect a government announcement in the second half of 2025.
Initially, participants anticipated China would counteract US tariffs by stimulating its economy, temporarily supporting iron ore prices for some time.
However, it has become clear to the participants that it is becoming more and more apparent that there’s probably not going to be any big — they’ll probably continue to reassess their economy and support when needed, Eric Bretting from Macquarie Group said.