BMI, a research institution under Fitch Solutions, forecasts that iron ore prices will maintain an average level of $100 per ton in 2025. The demand outlook remains weak, which could continue to pressure prices unless additional support measures are implemented in Asia in the coming months.
The report highlights that steel production in some Asian countries remains sluggish, with iron ore demand persistently low and inventories significantly increasing. These factors are expected to constrain iron ore prices in the near future. On the supply side, major miners are maintaining stable production levels.
Key production insights include:
- BHP's iron ore production reached a record 260 million tons in fiscal year 2024, a 1% increase year-over-year. The 2025 forecast is set between 255 and 265.5 million tons.
- Fortescue's 2025 iron ore shipment guidance remains between 190 and 200 million tons, slightly above the 191.6 million tons in 2024.
- Vale recently raised its 2024 production guidance to 323-330 million tons, up from the previous 310-320 million tons.
- Rio Tinto's shipments grew 3% year-over-year to 332 million tons in 2023, with 2024 guidance set between 323 and 338 million tons.
Looking ahead, BMI anticipates that iron ore prices will enter a prolonged downtrend beyond 2024. The slowdown in global steel production growth and increased output from major producers are expected to lead to market oversupply. Long-term forecasts suggest a gradual price decline from an average of $110 per ton in 2024 to $78 per ton by 2033. Although this is significantly lower than the $156 per ton in 2021, the average price from 2024 to 2028 is projected at $97 per ton, still above the $78 per ton average from 2016 to 2020.
The primary driver for the price decline is the slowing demand growth in some Asian countries, a trend already in its early stages. The shift from industry and steel-intensive sectors to services and low-steel-intensive sectors aligns with changes in economic growth models, expected to suppress steel consumption and production growth rates.
