Cadia Beijing Investment Fund Management Co., Ltd. — The 2024 annual performance reports of the world’s four largest iron ore miners have been released: total iron ore output reached 1.1576 billion tonnes.

The 2024 annual production and sales reports of the world’s four largest iron ore miners have been released. Vale’s iron ore output hit a new high since 2018, approaching Rio Tinto’s level as the world’s largest iron ore producer. Vale Recently, Vale released its 2024 production and sales report, showing that its iron ore output in 2024 reached nearly 328 million tonnes—up 2% year-on-year—and exceeded its original target range of 310–320 million tonnes. Copper output for the same period totaled 348,200 tonnes, up 6.6% year-on-year and slightly above its guidance target of 345,000 tonnes; nickel output stood at 159,900 tonnes, down 3% year-on-year. Vale’s output growth surpassed expectations, primarily driven by increased production from both its Northern and Southeastern systems. In the Northern system, Brazil’s S11D mine achieved a record output of 83 million tonnes last year; in the Southeastern system, the commissioning of the fourth processing line at the Brucutu mine pushed quarterly output to its highest level since 2019. Quarterly breakdown: Vale’s Q4 iron ore output was 85.28 million tonnes, down 5% year-on-year. The company attributed this decline mainly to portfolio optimization decisions prioritizing higher-margin products, resulting in reduced output from its Southern system. Copper output rose due to improved performance at Salobo 1 and 2 mines, completion of the Salobo 3 expansion project, increased throughput at the Sudbury concentrator, and gradual ramp-up of the VBME project. Rio Tinto Another mining giant, Rio Tinto, saw a decline in iron ore output last year but retained its title as the world’s largest iron ore producer by a narrow margin—its sixth consecutive year holding this position. In 2024, Rio Tinto’s Pilbara iron ore output stood at 328 million tonnes, with shipments totaling 328.6 million tonnes—both down 1% year-on-year. Rio Tinto stated that its productivity improved by 10 million tonnes last year, yet this gain failed to fully offset the impact of resource depletion—particularly at the Yandicoogina and Paraburdoo mines. Rio Tinto is progressively developing the West Pit iron ore deposit at Paraburdoo. In 2024, Rio Tinto’s copper output reached 697,000 tonnes, up 13% year-on-year. This growth stemmed primarily from increased underground production at Oyu Tolgoi and receipt of higher-grade copper ore (grade rising from 0.83% to 0.99%) at the Escondida concentrator. Last year, Rio Tinto continued its push into the lithium sector. In October, Rio Tinto announced plans to acquire all shares of lithium producer Arcadium for USD 6.7 billion (approx. RMB 4.7357 billion). The acquisition is expected to close in mid-2025. According to Reuters, this deal will make Rio Tinto the world’s third-largest lithium producer, behind Chile’s SQM and U.S.-based Albemarle. On December 12, Rio Tinto announced approval of a USD 2.5 billion (approx. RMB 1.8222 billion) expansion of its first commercial-scale lithium refinery—the Rincon project in Argentina—to boost annual battery-grade lithium carbonate output to 60,000 tonnes. The mine’s projected lifespan is 40 years, and construction of the expanded facility is scheduled to begin in mid-2025.

Iron ore’s extraordinary profitability is fading—will prices fall to USD 90 per tonne in the second half?

Data shows that Rio Tinto’s underlying profit for the six months ended June 30 stood at USD 4.81 billion—below market expectations of USD 5.05 billion—and marked its weakest first-half performance since 2020. Falling iron ore prices during the first half—driven by reduced steel output in major consuming countries like China, alongside increased iron ore supply from Australia, Brazil, and South Africa—eroded Rio Tinto’s earnings from steelmaking raw materials. Vale’s net profit for Q2 also declined 24% year-on-year to USD 2.12 billion—still outperforming analyst expectations. According to a London Stock Exchange Group (LSEG) survey, analysts had previously forecast the company’s net profit for the quarter ended June at USD 1.44 billion. The prior-year period included a one-off gain from the sale of Vale’s Indonesian subsidiary, resulting in a relatively high base. A Morgan Stanley report states that, given market expectations that China will curb steel industry overcapacity and replenish inventories before the end of 2025, iron ore prices may rebound to USD 100 per tonne by year-end. Regarding the outlook for iron ore prices, Goldman Sachs analyst Aurelia Waltham expects iron ore to trade between USD 95 and USD 100 per tonne for the remainder of Q3. Industry consensus aligns with this view: following macroeconomic cooling, iron ore prices are expected to revert toward fundamentals. With overseas major miners completing maintenance shutdowns and new mines ramping up production, iron ore shipments are anticipated to rise significantly both quarter-on-quarter and year-on-year. Meanwhile, demand is expected to decline markedly due to the impact of the ‘Grand Military Parade’; thus, the oversupply situation for iron ore remains unchanged. Concurrently, as the seasonal downturn for finished steel products materializes, pressure across the entire black metals market intensifies. Iron ore prices are projected to fluctuate between USD 92 and USD 100 per tonne. Fangzheng Mid-term Futures believes that shipments from the four major miners in H2 are expected to increase year-on-year; however, BHP, Rio Tinto, and Vale have kept their production and sales guidance largely unchanged, while Fortescue Metals Group (FMG) raised its sales guidance only slightly—suggesting limited upside potential for H2 shipment growth. Non-mainstream supply may gradually increase following price rebounds, but based on H1 experience, if prices return near USD 90 per tonne, non-mainstream supply could remain constrained. Therefore, overall supply pressure in H2 is expected to exceed that of H1—but supply alone is unlikely to drive prices below USD 90 per tonne. Continued attention should be paid to steel demand and hot metal output trends. Fangzheng Mid-term Futures notes that although global iron ore shipments in H1 2025 fell short of expectations, this will not halt the onset of a new, modest global expansion cycle for iron ore supply. After six to seven years of low supply growth, projects such as Onslow and Simandou are gradually coming online, and Vale aims to reach pre-disaster output levels by 2026—signaling a gradual increase in global iron ore supply, albeit at a slower pace than the previous expansion cycle. Looking back at China’s domestic supply-side reform, iron ore underperformed other black commodities during that period—first, due to demand headwinds; second, because global supply growth remained robust from 2016 to 2018, only slowing markedly after Vale’s 2019 tailings dam disaster. Thus, if China again restricts steel output to counter internal overcompetition, the scenario facing iron ore would resemble that of 2016–2018: domestic demand under pressure and steady or rising overseas supply—exerting long-term downward pressure on prices and likely causing iron ore to continue underperforming other black commodities.

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