(Bloomberg) — The world’s biggest iron ore miners face a difficult start to the year, after extreme weather impacted production and as their biggest customer China braces for a trade war.

Most Read from Bloomberg

• Trump Signs Executive Orders on Federal Purchasing, Office Space

• How Did This Suburb Figure Out Mass Transit?

• DOGE Places Entire Staff of Federal Homelessness Agency on Leave

• Why the Best Bike Lanes Always Get Blamed

• LA County Floats Leaner Budget Burdened by Fire and Legal Costs

This week, BHP Group Ltd. (BHP), Rio Tinto Group (RIO), and Vale SA all reported drops in quarterly shipments from the year before, the result of disruptions from cyclones in Australia’s Pilbara and heavy rains in northern Brazil. Rio was worst affected, with exports slumping 9% to a six-year low.

That leaves the companies needing to play catch-up on their supply targets at a time when escalating tensions with the US could wreak havoc on the Chinese economy. The question now is whether Beijing will deliver enough stimulus to support demand for steel and its inputs, of which iron ore is key.

“We might see a recovery phase where these companies ramp up production to compensate for the lost output,” said David Cachot, an iron ore research director at Wood Mackenzie Ltd. “Market participants are waiting to see what Beijing will do to further stimulate its economy, an additional source of concern the country did not need.” 

Market Dives

Before the supply disruptions hit and trade tensions ratcheted higher, the iron ore market was contending with a surge in supply just as demand in China’s maturing economy was dwindling. Still, benchmark iron ore futures in Singapore were steady, averaging around $103 a ton over the first three months, about the same as the previous quarter.

But the market dived earlier this month, to below $95 a ton at one point, after the Trump administration announced punitive tariffs on China, and Beijing responded with its own eye-watering levies on the US. 

Now, China’s economic targets are in doubt, and officials have set a clear goal of expanding domestic consumption to counter the hit to exports. That could lift demand for the steel used in vehicles, household durable goods and machinery. Iron ore traders are also probably hoping that Beijing doesn’t ignore the playbook it has used during previous downturns, which involves splurging on more steel-intensive infrastructure to generate growth.

BHP Chief Executive Officer Mike Henry warned on Thursday that slower global growth and a fragmented trading environment could have a significant impact on the company.

“China’s ability to shift toward a consumption-led economy and for trade flows to adapt to the new environment will be key to sustaining the global outlook,” he said.  

—With assistance from Paul-Alain Hunt.

Most Read from Bloomberg Businessweek

• GM’s Mary Barra Has to Make a $35 Billion EV Bet Work in Trump’s America

• Trade Tensions With China Clear Path for Salt-Powered Batteries

• How Mar-a-Lago Memberships Explain Trump’s Tariff Obsession

• Trump Is Firing the Wrong People, on Purpose

• The Beauty Salon Recession Indicator

©2025 Bloomberg L.P.