China’s iron ore mining sector weakened in the first half of 2026, while rising imports and longer trade routes provided strong support to the dry bulk shipping market, particularly the Capesize segment, according to BIMCO.
Chinese iron ore mining fell 7% year-on-year (y/y) in the first six months of 2026, even as net imports increased by 6% y/y. As a result, imported iron ore now accounts for 57% of China’s total iron ore supply, up from 50% in the first half of 2022.
“China is increasingly sourcing its iron ore from abroad because it is often of higher grade and competitively priced,” said Filipe Gouveia, Shipping Analysis Manager at BIMCO.
Steel demand remains under pressure
Despite a slight increase in China’s overall iron ore supply, demand from steel mills weakened during the period. Chinese steel production declined 3% y/y, while production from Basic Oxygen Furnaces (BOFs)—which account for most iron ore consumption—is estimated to have fallen by around 4%.
The weaker steelmaking activity contributed to elevated iron ore inventories at Chinese ports throughout the first half of the year.
Iron ore trade boosts Capesize demand
The decline in domestic mining and increased reliance on overseas suppliers nevertheless generated stronger demand for dry bulk shipping.
Demand for dry bulk vessels transporting iron ore to China increased 9% y/y during the first six months of 2026, driven by higher cargo volumes as well as longer average sailing distances.
The trend particularly benefited the Capesize market and contributed to a 79% y/y increase in S&P Global Energy’s Platts Capesize T4 Index, a global benchmark based on four key Capesize routes.
China remains the dominant driver of global iron ore shipping demand, accounting for approximately 24% of global dry bulk ship demand and 59% of Capesize ship demand.
Australia and Brazil remain dominant suppliers
Imports from Australia and Brazil increased by 4% and 6% y/y, respectively, with the two countries together accounting for 83% of China’s iron ore imports.
However, supply growth from smaller exporters is becoming increasingly significant. Iron ore shipments from Guinea, Liberia and Peru recorded notable increases, with their longer sailing distances providing additional tonne-mile demand for dry bulk vessels.
Guinea’s Simandou mining project, which began exporting iron ore at the end of 2025, is expected to ship around 20 million tonnes in 2026, with most of the volumes destined for China. Production could eventually rise to 120 million tonnes annually by the end of the decade.
In Liberia, ArcelorMittal is targeting a 15 million-tonne increase in iron ore exports in 2026, while Peruvian exports strengthened in the second quarter after port-handling disruptions had affected shipments during the same period in 2025.
Outlook for the second half of 2026
BIMCO expects China’s iron ore supply could weaken year-on-year in the second half of 2026, although comparisons will be against a strong second-half 2025 baseline.
Iron ore inventory building during the second half of last year is unlikely to be repeated given already elevated stock levels. At the same time, steel production could remain subdued amid weak demand from China’s property sector.
However, demand for flat steel products from the automotive sector could provide some support.
“Consequently, the strength of iron ore shipments could depend on imports remaining competitive against domestic mining,” Gouveia said.
For the dry bulk market, the outlook remains closely tied to China’s purchasing patterns. While weaker steel production could limit cargo demand, increased reliance on overseas iron ore—particularly from longer-distance suppliers—could continue to support Capesize tonne-mile demand through the remainder of 2026.
