What's Ahead for Iron Ore Price Momentum in 2026: Market Outlook and Key Catalysts

The outlook for iron ore price trajectories in 2026 presents a mixed picture. Despite recovering from lows hit in 2024, the commodity faces structural headwinds that could keep valuations subdued. Experts anticipate prices will drift toward the US$94-US$100 range, with potential volatility driven by new mine supply, shifting demand patterns, and regulatory changes.

2026 Iron Ore Price Forecast: What to Watch

Industry analysts project a challenging year ahead for iron ore price levels. Project Blue Principal Analyst Erik Sardain outlined a scenario where prices drop below the US$100 per metric ton (MT) threshold in the second half, though first-half strength may be supported by seasonal demand: prices are expected to range between US$100-US$105 per MT in H1, declining below US$100 in H2. External forecasters paint an even more cautious picture—BMI estimates US$95, while RBC Capital Markets sees average prices around US$98, with consensus hovering near US$94.

The primary headwind is a mismatch between supply and demand. While major miners including Rio Tinto, China Hongqiao Group, and newcomers are ramping up production, global steel consumption is expected to moderate. China’s construction sector, which historically drove roughly 50 percent of steel demand, continues its structural decline despite government stimulus efforts.

Understanding Iron Ore Price Drivers for 2026

Structural demand concerns reshape the market

China’s property market downturn, which intensified after major developers collapsed in 2021, remains a significant dampener on steel consumption. Although the broader Chinese economy is forecast to grow 4.8 percent, real estate is expected to keep contracting. Sardain notes that while this is partially offset by urbanization and industrialization trends, overall steel production in China is set to trend lower over time.

New supply reshapes iron ore price dynamics

Guinea’s Simandou mine—a game-changer with 65 percent iron content—shipped its first cargo in December 2024. The project, owned by consortia including Rio Tinto, China Hongqiao Group, and others, will ramp production significantly: 15-20 million MT expected in 2026, escalating to 40-50 million MT in 2027. This influx of low-cost, high-grade ore will put pressure on iron ore prices and supply chains.

Decarbonization accelerates a structural shift

Europe’s Carbon Border Adjustment Mechanism (CBAM), now in effect, and China’s emission caps by 2030 are driving a shift toward electric arc furnaces. These facilities use scrap steel as primary input rather than raw iron ore. Electric arc furnaces currently represent 12 percent of China’s steel production but are projected to reach 18 percent within the next decade. This transition directly threatens long-term iron ore demand, as countries expanding steel output (India, Russia, Brazil) are either self-sufficient or not major importers.

How Iron Ore Price Performed in 2025: A Year of Volatility

Iron ore started 2025 at US$99.44 per MT, rallying to US$107.26 by mid-February. However, March brought sharp declines toward US$100, followed by an April slump to US$99.05 during a broader base metals rout. The first half deteriorated further—prices sank to a yearly low of US$93.41 on July 1, pressured by China’s property sector weakness and escalating US tariff rhetoric.

Recovery arrived in Q3. Iron ore rebounded above US$100 in August, peaking at US$106.08 in September. The final quarter saw consolidation between US$104-US$108, with an annual high of US$107.88 posted December 4 before retreating to US$106.13 by year-end.

Key Factors That Shaped Iron Ore Price Action in 2025

Tariff uncertainty created near-term noise

In April, US tariff announcements—including a 10 percent across-the-board levy and threats of retaliatory measures—sparked recession fears and triggered commodity sell-offs. While markets rebounded as policy was moderated following bond market volatility, the uncertainty continued weighing on sentiment throughout the year.

China’s property sector remained the core story

The collapse of Country Garden and Evergrande, combined with failed government stimulus, kept real estate in structural decline. Since construction is a massive consumer of steel (and thus iron ore), this weakness cascaded through the entire supply chain and was the dominant factor suppressing iron ore price growth in H1.

Looking Beyond 2026: Structural Challenges Mount

Tariff scenarios remain fluid. While US steel demand exceeds domestic capacity, Chinese imports play a minimal role—the US primarily uses electric arc furnaces with ferrous scrap inputs. Brazilian and Canadian tariffs exist but include exemptions for iron ore pellets; however, CUSMA renegotiation in 2026 creates uncertainty around these protections.

The supply-demand asymmetry will be the defining feature. Soft demand growth colliding with Simandou’s production ramp and increased output from other majors suggests further iron ore price pressure. The structural shift toward decarbonization and electric arc furnaces will act as a multi-year headwind, limiting upside for the commodity regardless of near-term seasonality.

For iron ore price watchers, 2026 appears positioned as a year where supply exceeds demand appetite, keeping the commodity range-bound to lower, with consolidation around current consensus levels.