Mysteel Analysis: Rio Tinto’s Full-Year Plan Progresses Steadily; Iron Ore Product Mix Adjusted

Rio Tinto—the world’s top iron ore producer—released its Q3 2023 production and shipment report on October 17 (Beijing time). Benefiting from robust domestic demand, its Pilbara operations recorded growth in iron ore shipments both year-on-year (YoY) and quarter-on-quarter (QoQ) during the quarter. However, to safeguard the quality of its flagship products, SP10 fines and lumps saw a significant YoY output increase this quarter, while PB fines and lumps declined YoY accordingly. This product-mix adjustment led to a marginal YoY decline in Rio Tinto’s overall Pilbara iron ore production. Rio Tinto maintains its full-year Pilbara shipment guidance at 320–335 million tonnes. Based on the midpoint, cumulative shipments for the first three quarters have already exceeded 75% of the annual target—and outpaced last year’s pace—fully aligning with prior expectations. Therefore, Mysteel forecasts that Rio Tinto’s 2023 full-year shipments will land at the upper end of its guidance range, potentially surpassing 330 million tonnes. I. Stable and Slightly Growing Shipments, Driven by Strong Domestic Demand The latest data shows that Rio Tinto’s Pilbara iron ore shipments rose 6% QoQ and 1% YoY in Q3; shipments for the first three quarters grew 5% YoY. Unquestionably, stable iron ore production has underpinned sales growth—fueled by improved performance across the Pilbara system, steady ramp-up of the Gudai-Darri project, and enhanced productivity of safety systems. Notably, the Gudai-Darri project commenced commercial operations in late Q2 2022 and reached its designed capacity of 43 million tonnes within 12 months, consistently supporting Rio Tinto’s iron ore production and sales. Table 1: Rio Tinto’s Quarterly Shipments by Product (Unit: 10,000 tonnes) Additionally, in Q3, iron ore hot metal output at China’s 247 steel mills remained at historically high levels—repeatedly setting new records—supporting demand for Rio Tinto’s iron ore products, especially PB fines and PB lumps. Demand for the latter was further boosted by frequent sintering restrictions imposed in Hebei Province since Q3. II. Adjusted Product Mix; Slight YoY Production Decline in Q3 According to the latest quarterly report, Rio Tinto’s Pilbara iron ore production rose 3% QoQ but fell 1% YoY in Q3. SP10 fines and lumps surged YoY, while PB fines and lumps declined YoY. This product-mix shift resulted in a marginal YoY dip in overall Pilbara production—below market expectations. The primary driver is Rio Tinto’s strategic decision to boost supply of SP10 fines and lumps—serving as a substitute for PB products—to maintain flagship product quality amid gradual depletion of older mines’ resources. Moreover, with Rio Tinto completing its next batch of mine capacity replacement projects, SP10 supply is expected to remain relatively high over the coming years—though the duration will depend on approval timelines and implementation progress of individual projects.

With the world-class Simandou iron ore project commencing operations, how will the global iron ore supply landscape change? What long-term impacts will it bring?

Brazil’s iron ore exports hit a record high, yet prices continue falling—giant bulk carriers depart fully loaded, yet cannot offset weakening demand from the world’s largest buyer. An invisible industrial contest is quietly unfolding in the global iron ore market. On one side, the ‘Big Four’ miners produced a record 851.65 million tonnes in Q3 2025; on the other, Chinese steelmakers’ profitability plummeted from 63.64% to 35.93%, squeezed by upstream cost pressures. By December 2025, iron ore inventories at Chinese ports climbed to 161 million tonnes—the highest level for this period since 2018—while steel mills slashed their imported ore inventories to 88.342 million tonnes, the lowest in five years. A price–profit paradox emerged in the global iron ore market in 2025: falling prices coexisted with robust miner profits. According to data from Qihuo Daily Network, China’s average iron ore import price from January to August 2025 stood at USD 98.7/tonne—significantly lower than the full-year 2024 average of USD 109/tonne. Yet the Big Four’s cost control remains extraordinary: Rio Tinto, BHP, Vale, and FMG all maintain iron ore costs (CFR Northern China ports) below USD 40/tonne. With China’s import price at USD 98.7/tonne, these miners still enjoy profit margins exceeding 200%. In Q3 2025, Vale’s average iron ore price reached USD 94.4/tonne—a QoQ increase of USD 9.3/tonne—driven by its product mix shifting toward higher-value iron concentrate. Notably, over 90% of profits across China’s steel industry chain are captured by overseas miners, while domestic steel mills saw blast-furnace rebar profits plunge from CNY 282/tonne in July 2025 to minus CNY 99/tonne by November 2025. A new global supply pole is rising, disrupting traditional supply structures. In the first three quarters of 2025, the Big Four collectively produced 851.65 million tonnes—an increase of 1.2% YoY. More importantly, the global iron ore supply map is undergoing transformation. In Q3 2025, the four major producers exhibited divergent output performances and project progress—jointly reshaping the supply landscape: Vale achieved Q3 output of 94.4 million tonnes, up 3.8% YoY, with its S11D project delivering its highest-ever output for the quarter. Rio Tinto produced 84.1 million tonnes in Q3, up 0.1% YoY; its critical West Angelas expansion project advanced steadily toward full capacity, expected by end-2025. BHP’s output totaled 70.25 million tonnes, down 1.9% YoY—but its FY2026 shipment target remains unchanged. FMG posted strong growth, producing 50.8 million tonnes, up 5.8% YoY, as its Iron Bridge project continues ramping up capacity. This comparative data vividly reflects the operational dynamics of key miners in Q3 2025—providing foundational context for subsequent analysis of market supply–demand and profit structure shifts. The Simandou project achieved its first heavy-load ore train dispatch on October 20, 2025, with initial shipments commencing in November 2025.

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