Iron ore prices to stay elevated in 2026

Analysts predict iron ore will stay robust in 2026, even as upside potential remains constrained by changing supply and demand dynamics.

According to forecasts from BMI (a FitchSolutions company), the annual average price of iron ore is set to settle at $US95 per tonne in 2026, slightly down from $US97 in 2025, as additional supply from Rio Tinto’s Simandou project in Guinea comes online and production remains robust across major miners.

Despite low near-term inventories in mainland China supporting current prices, continued steel production curbs driven by environmental regulations and weak domestic demand are expected to cap gains.

BMI said mainland China’s domestic demand for steel and iron ore remains weak, with the construction sector underperforming and no major stimulus from Beijing for heavy industries. The official manufacturing purchasing managers’ index (PMI) contracted for the seventh consecutive month to 49 in October 2025, while new home prices continued to fall.

However, the market floor remains supported by easing trade tensions and a resilient global economy. Iron ore prices at Qingdao Port are currently hovering around $US99.1 per tonne, with the year-to-date average at $US96.1 per tonne.

Recent growth revisions forecast mainland China’s economy expanding five per cent in 2025 and 4.5 per cent in 2026, slightly stronger than earlier expectations.

On the supply side, major miners are performing well. Rio Tinto achieved its highest second quarter Pilbara production since 2018 and BHP delivered 77.5 million metric tonnes in the fourth quarter of 2025, reflecting operational improvements. Fortescue also reported a 10 per cent year-on-year increase in its 2024–25 financial year (FY25) production.

Looking longer term, BMI forecasts a gradual decline in iron ore prices, projecting an average of $US78 per tonne by 2034, driven by slower steel production growth, higher output, and the rise of greener steelmaking technologies globally.