How the Australia-Brazil duopoly (Rio Tinto, BHP, Vale), China's 70% import dominance, and price swings from $220/ton to $90/ton define the world's most traded commodity after oil.
Educational content only — not personalized financial, legal, or tax advice.
Iron ore is the essential raw material for steel, the building block of modern infrastructure. Global iron ore is defined by highly concentrated supply, a dominant single buyer, and a massive seaborne trade network.
Australia and Brazil supply nearly 80% of global seaborne iron ore. Australia's Pilbara: vast, high-grade hematite. Brazil's Carajas (Vale): among the world's highest-grade ore (65%+ iron content) commanding a market premium. The three mining giants: Rio Tinto (ASX: RIO), BHP Group (ASX: BHP), Vale S.A. (NYSE: VALE). Cash costs often below $20/wet metric ton — profitable even at $70/ton prices.
China produces 50%+ of world's crude steel and imports ~70% of global seaborne iron ore. China's economic policy IS the iron ore market. As China's economy shifts from investment-led to consumer services, and real estate deleverages, iron ore demand faces structural headwinds. Electric arc furnace (EAF) adoption (which uses scrap, not iron ore) threatens long-term demand.
Pricing: benchmark indices (Platts IODEX, 62% iron content, CFR Qingdao). No longer annual bilateral contracts — daily spot-indexed.
Price history: 2021 peak: $220/dry metric ton (pandemic stimulus + supply disruptions). 2024: ~$90/ton (China property slowdown, elevated port stocks). These swings directly impact Australia's and Brazil's export revenues and the global steel industry. See Copper for comparison.