The Australian Department of Industry, Science and Resources has announced that it forecasts a gradual decline in iron ore prices until the end of 2027 due to weak steel demand and increased iron ore supply.
Spot iron ore prices have remained stable at just above $100/t since August this year. Although steel production in China fell, iron ore prices remained stable due to increased inventories by Chinese buyers. A pricing dispute between Australian miner BHP and China Mineral Resources Group (CMRG) has led Chinese mills to reject some of BHP's cargo. In addition, global iron ore trade is expected to grow by 1.5 percent annually until 2027, with new supplies coming from the Simandou mine in Guinea, Brazil, and expanded Australian mines. The Simandou mine began operations in November this year and will have a maximum capacity of 120 million tonnes per annum.
From $93/mt in 2024, iron ore prices are forecast to average $87/mt in 2025, falling to $85/mt in 2026 and then to $ 82/mt in 2027.
Global steel production drives iron ore demand
Global steel production, a key driver of iron ore demand, fell 1.9 percent year-on-year in the first 10 months of this year to 1.52 billion tonnes. mainly due to lower production in China, the EU, Japan, South Korea and Russia. Global steel production is forecast to decline by two percent in 2025 due to slowing global economic growth and construction activity, rising trade
