Posted on 27 Nov 2025
China has received its first shipment of iron ore from the Simandou project in Guinea, signalling a major change in Asia’s iron ore trade.
This could have serious effects on India’s ore exports to China over the next five years. The first Simandou quantities are comparatively small, with about 0.8-1.5 million tonnes expected to be shipped and the majority going to China by end-2025. However, Kallanish observes that even cautious projections indicate China may slowly shift from Indian low-grade ore to Simandou’s superior-quality material.
Simandou is expected to ramp up rapidly, with market reports indicating potential supply of around 25mt in 2026, 50mt in 2027, 85mt in 2028 and 110mt in 2029, assuming progress stays on track.
If China buys about 70% of this output, its imports from Simandou could reach 17.5mt in 2026 and up to 77mt by 2029.
Since Simandou’s ore is very high grade – 65% Fe and above – with relatively lower impurities, it is well-positioned to replace lower-grade ore from other suppliers, particularly India. Assuming Simandou’s output grows as expected, Kallanish estimates it could displace 30-60% of existing Indian exporters’ volumes.
The 30-60% range is based on market feedback, with 30% seen as the minimum impact and 60% as the upper end.
India exported about 33mt of iron ore to China in fiscal 2025. At the lower end (30%), India could thus lose 5-6mt of supply in 2026 and 11-12mt in 2027. At the higher end (60%), losses may rise to 10-11mt in 2026 and 21-22mt in 2027.
By 2028-29, depending on how fast Simandou ramps up, its high-quality ore could replace almost all of India’s shipments to China, unless Indian ore quality improves or sellers offer cheaper material that can be blended with higher-grade ores.
However, India is also dealing with its own challenges. Indian iron ore generally has higher impurities like alumina and silica, uneven sizing, and limited beneficiation, which makes it less competitive than Simandou’s cleaner ore. On top of this, India’s mining costs are already high, making it difficult for miners to cut prices even for lower-grade material.
Transport costs also favour Simandou because China is investing heavily in Guinea and wants to reduce its dependence on Australia and Brazil.
To reduce the risk, Indian miners are expanding pellet capacity and improving ore quality. Pellet plants are growing in Odisha and Chhattisgarh states, although many are not running at full capacity and transport from mines to plants remains difficult.
Some exporters are also testing higher-grade washed fines and targeting new markets in Southeast Asia, where steel capacity in Vietnam, Indonesia and Bangladesh is increasing.
A Delhi-based iron ore trader tells Kallanish: “Simandou changes the game not overnight, but steadily and decisively. Indian exporters have two to three years to improve quality, find new buyers/territories and move into higher-value products before displacement accelerates.”
India’s dependence on China for low-grade iron ore exports is becoming increasingly risky as the global market shifts towards cleaner, high-grade ore to support decarbonisation. Simandou is not just extra supply; it signals a long-term structural change.
Unless India speeds up beneficiation, expands pelletising and builds new export markets, its 30-35mt export base to China may shrink much faster than expected.
Source:Kallanish
