Iron ore prices are expected to decline next year as new supply comes online and demand from China faces ongoing pressure. This is according to a recent forecast from BMI, a unit of Fitch Solutions, which provides industry and risk analysis. BMI anticipates that iron ore will average US$95 a tonne in 2026. This is a decrease from the projected US$97 a tonne in 2025.
The expected price decrease is attributed to increased output from Guinea’s Simandou project. Steady production from major miners will also influence prices. While low iron ore inventories in China are currently providing some support to prices, BMI cautions that several factors could weigh on pricing in the coming months. These include steel production curbs, environmental regulations, and weak domestic demand in China.
BMI anticipates that China’s construction sector will continue to dampen market sentiment. This is due to the absence of significant stimulus measures. The firm does not foresee a dramatic collapse in iron ore prices. Easing trade tensions and relatively stable global economic growth should prevent this.
Looking further ahead, BMI projects that iron ore will enter a prolonged period of decline. It forecasts a price of US$78 a tonne by 2034. This long-term downtrend reflects evolving market dynamics and supply-demand factors.
