Moody’s expects iron ore prices to remain stable at $80-100/t in the coming years

Despite weak demand from China and high production, the market will remain balanced

International rating agency Moody’s expects iron ore prices to remain at $80-100 per tonne in the next 12-18 months. This forecast is driven by weak demand from China and high supply on the global market, SteelOrbis reports.

The reduction in steel production in China and the transition to more environmentally friendly technologies reduce the need for low-grade ore. Meanwhile, large mining companies continue to increase production volumes, which maintains a surplus in the market. Despite this, major producers remain profitable due to low production costs.

BMI Country Risk and Industry Research analysts shared a similar view. They maintain their forecast of the average annual price for 2025 at $100/t, although they recognize the pressure from weak demand. In particular, restrictions on steel production in China, problems in the Chinese construction sector and a slowdown in global economic growth remain the main constraints.

At the same time, a new wave of monetary stimulus in China and possible progress in US-China trade negotiations are causing some optimism. This may partially mitigate the risks of falling prices.

In the long term, BMI analysts predict a gradual decline in iron ore prices to $78/t by 2034. The reasons are the same: a slowdown in steel production and an increase in global ore production.

Thus, the iron ore market is expected to remain relatively stable in the coming years, but the long-term trend will remain downward.

Global iron ore exports in 2024 grew by only 2% year-on-year to about 1.6 billion tons. Australia remains the largest exporter of raw materials (866 million tons, +1.4 y/y). Brazil (390 million tons, +2.6% y/y) and South Africa (61 million tons, +3.4% y/y) are the second-largest exporters.