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Informist, Monday, Jun. 1, 2026

MUMBAI – Fitch Solution company BMI has slightly raised its annual average iron ore price forecast for 2026 to $101 per tonne from $95 per tonne, supported by strong Chinese imports despite healthier global supply. In Jan-Apr, China imported 418.6 million metric tonnes of iron ore, representing an 8% year-on-year increase, it said in a report. Although China's crude steel production declined 4.1% on year during the same period, a simultaneous decline in domestic iron ore production and lower ore grades in China are encouraging buyers to increase imports and build inventories. Locally mined iron ore typically contains around 20–30% iron content, significantly lower than the 60–70% iron content found in high-grade imported ore.

"Despite declining steel production growth in China, a simultaneous decline in domestic iron ore production and lower grades of ore extracted locally will ensure imports remain strong in the coming months," BMI said.

However, "we expect iron ore prices to moderate slightly in Q3 and Q4 2026, as global supply remains healthy with the new Simandou project in Guinea and strong production from global majors," BMI said. Iron ore shipments and production broadly increased or remained largely unchanged for most majors, with miners aiming to maintain their production levels. Among major producers, Vale has reaffirmed its 2026 iron ore production guidance of 335-345 million tonnes, after producing a seven-year high of 336 million tonnes in 2025. Meanwhile, BHP Group continues to target 258-269 million tonnes of iron ore production in 2026, supported by record first-half output and strong operational performance.

In the long term, beyond 2026, iron ore prices are forecast to decline to $78 per tonne in 2034 from an average of $101 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," BMI said. China's slowing demand growth will be the main driver of lower prices, a trend that is now already in its early stages, it said. 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. 

Meanwhile, "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 remain even weaker than expected. 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 95.18

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

Reported by Reshma Ravi 

Edited by Akul Nishant Akhoury

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