Macquarie, a global financial services group, predicted the seaborne iron ore market will be in surplus by about 50 million tons this year as China is likely to cut steel production. If steel production is forced to be reduced, China's steel output is expected to drop by 2.5% to 858 million tons in 2025, and iron ore demand will decrease by 37 million tons accordingly.

As Simandou may increase production significantly from 2026, Macquarie foresaw the market could face a structural oversupply. The risks of China's long-term supply-side reform have increased, especially after the launch of the 15th Five-Year Plan. Even as steel mill profits are supported, high-grade iron ore price spreads remain constrained due to high supply.