FERROUS WEEK: Guinea's Simandou ramp-up boosts iron ore exports, surpassing forecasts

The first part of this Ferrous Series provides an updated visualization of steel decarbonization efforts being undertaken across the Asia-Pacific. The second piece takes a closer look at Japan's green transformation, while the third examines how differing interpretations of carbon accounting have emerged to comply with CBAM. The fourth report looks at Simandou's export ramp-up and its impact on iron ore markets, while the fifth explores how the Mongolia-China coking coal trade has evolved. In the final piece, we interview an executive at coking coal trading company E-Commodities.

Guinea's Simandou iron ore project is ramping up exports faster than expected, with Rio Tinto's SimFer mine producing 600,000 metric tons of crushed ore on a wet basis in the first quarter of 2026 and shipping accelerating to three vessels monthly by March.

This has eased earlier concerns about the project's logistical viability and set the stage for potential oversupply in global seaborne markets.

The mine began operations in 2025 and remains in testing and commissioning, with first ore leaving in the fourth quarter of last year, Rio Tinto said.

First-quarter production represented crushed ore at the SimFer mine gate before train loading, while first sales were realized in April.

Guinea's iron ore exports have surged from a low 2025 base, with 5.7 million mt shipped year-to-date through June 9, all to China, according to S&P Global Commodities at Sea data. Full-year 2025 exports were at just 374,530 mt.

"Shipping data indicates that in December 2025 and January 2026, Capesize and Newcastlemax bulk carriers from Guinea — averaging just under 200,000 mt per vessel — departed twice a month, rising to three vessels per month in February and March," analysts at S&P Global Energy CERA said. "This is consistent with the initially announced ramp-up schedule."

Exports began in the fourth quarter of 2025 using Winning Consortium Simandou's (WCS) port facilities while construction of SimFer port facilities continues, Rio Tinto said. WCS is a joint venture between Winning Consortium Holdings and China's Baowu steel group.

The Simandou partners have built a 600-km main rail line, a 70-km spur to the SimFer mine and coastal port facilities, in addition to their respective mines.

For Simandou, sales are booked after ore has undergone tertiary crushing in China and been collected by the customer, with a two- to three-month lag between mine-gate production and sales, reflecting railing to the Guinean coast, shipping to China, tertiary crushing and customer collection, Rio Tinto said.

Market impact

At the current trajectory, with vessel frequency increasing to seven or eight a month by May, to 12-13 by December, exports could reach about 15 million mt in 2026, analysts said. This estimate contributes to a projected seaborne trade surplus of about 16 million mt in 2026.

"We view a full ramp-up to 120 million mt as achievable, but over a horizon longer than five years, and expect exports from Guinea rising to 70 million mt by 2028 from 15 million mt in 2026," analysts said.

The accelerating shipments are building pressure on iron ore prices, with CERA forecasting a substantial surplus in 2026 seaborne trade. The Platts IODEX CFR China closed 2025 at $108.5/dmt on Dec. 31 but has since dropped to $100.3/dmt as of June 8.

CERA expects prices to weaken through the end of 2026, with rising oversupply lifting the first-half average price to $105/dmt but bringing the annual average to $102/dmt. "The current price strength is likely to be unsustainable, given the underlying weakness in Chinese demand," analysts said.

Some China-based steel mill and trading sources said the recent ramp-up in Simandou shipments is faster than expected, and agreed that 2026 volumes could reach 15-20 million mt.

As China's steel output weakens gradually every year, if Simandou's annual shipments of iron ore could reach 40 million mt in 2027, the build-up in China's iron ore port stocks could accelerate and exert greater downward pressure on the iron ore prices, according to the China-based sources.

However, these sources noted that even at 20 million mt, the share would remain small against China's 1.259 billion mt of iron ore imports in 2025.

"But the pace of the Simandou iron ore shipment increase has been far beyond market expectations," a mill source said. "If Simandou can sustain high shipment volumes even during the rainy season, it may bring forward the market expectation of a supply surplus sooner, which would then have a negative impact on sentiment."

Fortescue, a major Australian iron ore miner, is pushing to capture shipments to China as Simandou ramps up. Still, the company appears to be in a comfortable position.

Fortescue is comfortable with its cost positioning should there be a bigger impact from Simandou on the market, Dino Otranto, CEO of metals and operations at Fortescue, said. "Rio Tinto itself has talked about Simandou to be replacement tonnes for their own portfolio," Otranto said.

Fortescue sees two scenarios from Simandou. Otranto said. "A couple of dollars [per ton] impact to the cost curve" at one end, and at the other end, the project will be merely "replacement tonnes to the market, and the market absorbs it."

Despite Simandou being suspended for a month after a fatality in February, the project remains "on track" and "some parts are ahead of schedule," Rio Tinto's iron ore chief executive Matthew Holcz said May 27. Construction of mine and port infrastructure is about 70% complete.