More Stories

Informist, Wednesday, Nov. 26, 2025

MUMBAI – Fitch Solutions company BMI has lowered its annual average iron ore price forecast for 2026 to $95 per tonne from $97 per tonne in 2025. The decline stems from additional supply entering the market from the Simandou project in Guinea, coupled with subdued Chinese domestic demand amid a struggling construction industry, it said in a report.

With demand for steel and iron ore in China remaining weak, Beijing continues to show little interest in large-scale stimulus measures. Instead, the government remains focused on consumption rather than supporting heavy industries, which weighs on iron ore demand, it said. However, prices will remain fairly supported because China's steel exports are rising, supported by easing trade tensions and a relatively strong global economy, despite the rise in prices being capped by steel production curbs--to reduce pollution and achieve environmental targets--in the country.

In the long term, beyond 2026, iron ore prices are forecast to decline to $78 per tonne in 2034 from an average of $95 per tonne in 2026. "We maintain our view that iron ore prices will consistently trend downwards, as cooling steel production growth and higher iron ore output from global producers will continue to loosen the market," it said. China's slowing demand growth will also be the main reason for lower prices, a trend that is now already in its early stages. A structural shift away from industrial, steel-intensive sectors towards services and less steel-intensive infrastructure will have a negative impact on iron ore demand, it said.    

BMI expects increased global shift toward low-carbon, green steel to accelerate, reducing the need for iron ore because it uses electric arc furnaces instead of current blast furnaces production models, which rely heavily on iron ore and coking coal. Stronger environmental rules and voluntary climate commitments are pushing the industry in this direction. As the European Union's carbon border mechanism takes effect, more startups are producing green steel, and major European steelmakers are testing low-carbon technologies. The US may examine similar measures to support greener steel production. These developments create additional downside risks for long-term iron ore demand, it said.

"Risks to our current price outlook exist on both sides given current volatile economic conditions," it said. Iron ore prices could fall further if China's economic momentum remains weaker than expected. On other hand, a stronger recovery in China's property market or supply disruptions at major mines could push prices higher. Weather-related issues, labour shortages, and energy problems in key producing regions such as Australia and South America could also tighten supply and support prices.  End

US$1 = INR 89.26

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Reshma Ravi

Edited by Subhojit Sarkar

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.