Major bulk exports, consisting of iron ore, coal, and grains, reached a record high volume on the Signal Ocean Platform in the third quarter of 2025, surpassing the volume from the previous year. This surge was primarily driven by strong demand from China across all three major bulk commodities, with September being particularly notable for increased coal and grain shipments.
Iron Ore Exports and China’s Contradiction
Global iron ore exports in September were recorded at 154.1 million metric tons (mt), a 2% increase year-over-year. This was propelled by record iron ore imports into China, which reached 118 mt in September.
- Counterintuitive Trend: China’s record iron ore imports run counter to the performance of its domestic steel industry, where crude steel production has been decreasing monthly for four consecutive months up to September. So far in 2025, China’s crude steel production is down 3% compared to the same period last year.
- Port Stocks and Future Demand: Due to the combination of increased imports and lower domestic steel production, Chinese iron ore port stocks reached multi-month highs by mid-October 2025. This inventory accumulation is expected to weigh on demand, likely leading to a softening or contraction in iron ore imports into China in October and November, which is a common trend in recent years.
- BHP Pricing Dispute: At the beginning of October, BHP faced a standoff with a state-run Chinese iron ore buyer, the China Mineral Resources Group (CMRG), which placed a halt on purchasing BHP products over pricing disputes, particularly for lower-grade iron ore. CMRG is also pushing for more transactions to be conducted in RMB rather than USD. While there were unconfirmed reports that 30% of CMRG’s spot dealings with BHP would switch to RMB in Q4 2025, the negotiations remain at a standstill.
Coal Demand and Outlook
Global coal exports reached 127 mt in September, marking a modest 2% year-over-year increase, primarily supported by a 4% rise in thermal coal shipments.
- Drivers of Short-Term Demand: Strong thermal coal flows were concentrated in East Asia. China’s restrictions on domestic coal production have tightened supply, pushing domestic prices higher and making imported coal more competitively priced. Robust manufacturing and power generation in other East Asian economies, such as South Korea (imports up 47% y/y) and Japan (imports up 5% y/y), have sustained regional import demand.
- Near-Term Outlook: The short-term demand picture is positive. China is expected to continue restricting domestic output, limiting supply just as the East Asian region enters the winter season with typically higher power demand. Australia is positioned as the most likely supplier to fill this gap, having already seen its thermal coal exports surge by 21% in September, primarily heading to East Asia.
- Long-Term Outlook: The longer-term outlook for coal demand is less positive. While China has added the largest amount of coal-fired capacity since 2015 in H1 2025 (in line with its 2030 peak carbon deadline), the country’s heavy investment in renewable energy infrastructure is expected to cause Chinese coal demand to consistently soften after 2030.
Grains (Soybeans) Surge and Trade Tensions
Global soybean exports reached 13.3 mt in September, a significant 37% increase year-over-year. This global rise was driven by China, the world’s largest consumer, which saw its soybean imports surge by 66% in September.
- Absence of US Soybeans: Despite the surge in overall Chinese imports, no US-origin soybeans were discharged in China in September 2025 for the first time since 2018. The tariffs imposed by China on US soybeans are widely considered the reason for this drop-off, indicating that none of the latest US harvest has been purchased by Chinese buyers.
- Market Impact: Without a positive resolution to trade talks, US farmers will face pressure as other countries are unlikely to buy the volumes typically purchased by China. The situation could also impact China early next year during the Brazilian harvest season, depending on the available supply from Brazil, the largest supplier to China. Chinese buyers may need to look to US soybeans during this period to maintain consistent supply flows.
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Source: Breakwave Advisors
