Global iron ore prices will likely decline modestly in 2026 on weak demand and higher production, analysts said.
“Looking forward, prices are expected to fall modestly through to end-2027, because of both weak steel demand and higher iron ore supply. From $93 (free-on-board) a tonne in 2024, the iron ore price is forecast to average $85 a tonne in 2026, and then $82 a tonne in 2027,” said the Australia’Office of the Chief Economist (AOCE).
“Fundamentally, the supply-demand structure for iron ore remains better than that of finished steel, continuing to show relative resilience within the industry chain. Overall, iron ore prices are expected to continue a sideways movement in the near term,” said Shanghai Metal Market (SMM) News.
“Over the medium-to-long term, we expect that lower prices will push iron ore production into stagnation and subsequent decline in 2032-34,” said BMI’s CreditSights, a FitchSolutions Company.
Current price
Iron ore futures on the Dalian Commodity Exchange expiring in May, the most popular contract, ended at 778.5 Chinese yuan ($110.76) a tonne. Iron has been almost stable this year, with prices dropping by 0.6 per cent.
Global iron ore production growth will accelerate, averaging 2.7 per cent growth over 2025-29 compared with 1.2 per cent over the previous five years. This is expected to lift annual production by 275.7 million tonnes (mt) by 2029 compared with 2025 levels.
CreditSights said it expected iron ore production in Australia to grow by 2.5 per cent in 2025, driven by expansions and the commencement of production at smaller projects, including the ramp-up of Mineral Resources’ Onslow Iron and Fortescue’s Iron Bridge.
“We believe that Australia’s placement at the lowest end of the global iron ore cost curve will provide a healthy buffer against falling prices over our forecast period,” it said.
Seaborne trade to grow
The AOCE said the global seaborne iron ore trade is expected to grow by 1.5 per cent annually through 2027, with new supply from Simandou (Guinea), Brazil, and expanded Australian mines. The Simandou mine commenced operations in November 2025 and will have a maximum capacity of 120 mt a year.
SMM said steel mills bought hand-to-mouth, and market trading activity was moderate. “Data showed a slight decrease in the production of the five major steel products, with total inventory continuing to decline. Current end-use demand is in the off-season, and consumption is expected to decline further, with overall market sentiment turning weak,” it said.
Global steel production in the first 11 months of this year was 1.69 billion tonnes, down 1.4 per cent from a year ago, data from the World Steel Association showed. Production in China (-2.7 per cent), Russia (-7 per cent), Japan (-3.6 per cent) and the US (-2.2 per cent) fell. The output increased in India (8.9 per cent), Turkiye (11.2 per cent) and Brazil (5.6 per cent).
Subsequent output dip
CreditSights said major players will continue to decrease costs and increase production, as remaining cost-competitive will be a focus for iron ore miners in a long-term weak price environment, with top firms investing in technology to maintain an edge.
“In the coming years, we expect Rio Tinto, BHP and Fortescue to drive Australian iron ore production. After 2028, we forecast that lower iron ore prices will lead to stagnation and a subsequent production decline,” it said.
The research agency said Brazil’s iron ore production growth will rebound in the coming years following a contraction over 2019-20. “We expect domestic iron ore production in Brazil to increase at an annual average of 3.6 per cent over 2025-29,” it said.
China’s iron ore production is expected to increase by one per cent in 2025, as the country aims to accelerate the construction of iron ore exploration projects and improve its capability to ensure iron ore supplies.
Indian output growth
In India, iron ore production is forecast to reach 290 mt this year, a 2 per cent growth on year. “Beyond 2025, we expect a steady acceleration in growth, with iron ore production increasing to 375 mt by 2034,” said CreditSights.
However, lower prices are expected to affect new project investments in Russia, where production will be up 1.5 per cent this year.
SMM said that as steel production gradually rebounds, and stockpiling begins for the Chinese New Year, there could be some upward movement.