Brazil's J. Mendes group has suspended its JMN Mineração iron ore mine in Minas Gerais, the fifth Brazilian producer to halt or cut output in recent weeks. Low iron ore prices and a 41% jump in Brazil-China freight costs are squeezing smaller miners.
At a glance
- Usiminas, Itaminas, CSN Mineração and Cabo Verde Mineração have all paused or cut output since early September.
- The benchmark Brazil-China freight rate stands at $33.20 a tonne, up 41.4% from a year earlier.
- JMN accounts for about 10% of the J. Mendes group's iron ore output, and no restart date has been set.
Background
Brazil is a major iron ore producer, and much of its ore is shipped to China. Smaller miners in Minas Gerais state operate on thinner margins than the biggest producers. When ore prices fall and shipping costs rise at the same time, those margins can disappear, even for ore sold within Brazil.
What happened
The J. Mendes group has halted operations at JMN Mineração, its iron ore mine between Desterro de Entre Rios and Piracema in Minas Gerais, SteelOrbis and Diário do Comércio reported. Layoffs began on October 6, and the suspension started on October 7.
The group said the step was needed to protect its long-term sustainability and competitiveness. JMN makes up about 10% of the group's iron ore production. No restart date has been set; the group will reassess the operation if market conditions improve.
Why miners are stopping
Two pressures are hitting at once. Iron ore prices have fallen to two-year lows on weak Chinese demand, while freight costs have climbed. The Tubarão-Qingdao rate, the benchmark for Brazil-China ore shipments, stands at $33.20 a tonne, up 41.4% from a year earlier, shipbroker Banchero Costa said. Higher bunker fuel prices linked to the Middle East war are behind the increase.
JMN does not ship ore to China, but it still felt the hit. Its domestic customers set prices against international benchmarks, which already reflect the freight cost of reaching China.
A wider pullback in Minas Gerais
JMN is the latest of several producers to pull back. Usiminas paused its Samambaia plant in early September, and Itaminas paused a plant in Sarzedo days later. CSN Mineração cut low-grade ore output at a plant in Ouro Preto at the end of September, and Cabo Verde Mineração halted production in early October.
The group keeps operating Ferro+ Mineração, which produces about 7 million tonnes a year. JMN had already cut its workforce from 359 to 125 in January 2025 to stay viable.
Our read
Outlook: neutral. Shutdowns at small Brazilian mines trim supply slightly, but weak Chinese demand still dominates the market.
What to watch
- Whether more small Brazilian miners halt output if freight stays high.
- Itaminas's planned restart in November.
- The Brazil-China freight rate and iron ore prices near $90 a tonne.
For information only, not investment advice.
Iron price in India
metalscost.com India reference price as of 2026-10-16.
Detailed analysis
Timeline
- 2026-10-07: J. Mendes group suspends operations at JMN Mineração.
- 2026-10-15: Iron ore futures in Singapore fall below $90 a tonne for the first time since 2024.
Demand Drivers
Weak Chinese steel demand has pushed iron ore to two-year lows.
Supply Drivers
Smaller, higher-cost Brazilian mines are leaving the market as margins vanish.
Geopolitical Risks
Higher bunker fuel prices tied to the Middle East war have pushed up the Brazil-China freight rate.
What could lift prices
- Mine shutdowns in Brazil reduce supply at the margin.
- Higher freight costs make Brazilian ore more expensive for Chinese buyers.
What could weigh on prices
- The shutdowns reflect weak demand, which is still driving prices lower.
- The shutdowns so far involve small producers, so the supply effect is limited.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Brazil | Medium | Several mines in Minas Gerais have halted, cutting jobs and output. |
| China | Low | Its weak steel demand is the root cause of the price slump. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Iron Ore Mining | Negative | Smaller producers are being forced to halt output. |
Who gains, who loses
- Shipowners: The Brazil-China freight rate is up 41.4% from a year ago.
- Mine workers in Minas Gerais: Layoffs began at JMN on October 6, following other mine pauses in the state.
Other ways this could play out
- If freight rates ease, some paused mines like Itaminas's could restart.
- If ore prices fall further, more small Brazilian producers could halt.
Price risks
- A recovery in Chinese steel demand could quickly lift iron ore prices.
- Lower fuel prices would ease freight costs and support Brazilian supply.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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