Macquarie has maintained iron ore price forecast at $103/t for 2026

The bank has revised its coking coal price forecasts upwards

The Australian investment bank Macquarie expects iron ore prices to remain stable due to rising production costs, despite a structural surplus in the market. The average forecast price for iron ore this year is $103/t, with the price in the third quarter expected to be around $100/t. This is reported by SteelOrbis.

In the first half of the year, high freight rates were the key factor supporting prices. However, in the third quarter, the market’s focus is likely to shift back to fundamental supply and demand factors.

The rise in freight rates and the upward shift in the cost curve for iron ore mining are driven by several factors:

• an increase in the cost of bunker fuel;
• growing demand for Capesize vessels due to active bauxite exports from Guinea;
• an increase in supply volumes from the Simandou iron ore project;
• and a pick-up in global coal trade.

According to Macquarie’s calculations, the 90th percentile of iron ore production costs rose from $81/t at the start of the year to $85/t. It is this rise that creates a price ‘floor’, which prevents the market from collapsing even when additional volumes of production come onto the market.

Against the backdrop of strong export figures in the first half of the year, the bank has raised its forecast for shipments from the Simandou project in Guinea for 2026 to 18 million tonnes. At the same time, analysts are cautious in their assessment of the long-term pace of capacity expansion due to the risks associated with the project’s implementation.

The bank has also revised its coking coal price forecasts upwards. This decision follows the May accident at a coal mine in the Chinese province of Shanxi, which resulted in fatalities. The forecast for the price of hard coking coal in 2026 has been raised by 3%, and that for semi-soft coking coal by 1%. Tighter safety inspections following the incident have led to a year-on-year decline in domestic coal production in China of approximately 9%, which has stimulated a recovery in import demand.

As reported by GMK Center, Fitch Ratings has revised its short-term price forecasts for mining commodities upwards. The short-term forecast for the price of iron ore in 2026 has been raised to $100/t (the previous estimate was $95/t). The expected price of iron ore for 2027 has also been revised upwards — to $90/t from $85/t previously.