BMI Bearish on Long-Term Iron Ore Market

According to MiningWeekly, research and consulting firm Benchmark Mineral Intelligence (BMI) has maintained its iron ore price forecast for this year at $100/mt, as it expects falling demand to drive prices down.

Although the easing of trade conflicts has provided some support for iron ore, BMI believes there is still a possibility of a decline in steel production, so the risks for iron ore have not diminished.

On May 6, the price of 62% Fe iron ore at Qingdao Port was $94.70/mt, with an average price of $96.50/mt since the beginning of the year.

Although iron ore prices remained relatively resilient at the start of 2025 and reached a high for the year of $102.90/mt on February 21, they remained below $100/mt in March and April. Despite a brief rebound in iron ore prices stimulated by supply disruptions caused by severe weather, the optimism did not last.

The decline in growth rates of major global economies and the intensification of trade conflicts have shifted market sentiment. Falling steel production and a sluggish real estate market are the main factors contributing to the decline in iron ore prices, BMI said.

Iron ore prices are susceptible to stimulus policies, and negotiations on trade agreements among major economies can help alleviate downward pressure on iron ore prices.

According to data from the World Steel Association, global crude steel production fell by 0.4% YoY in Q1. India and Brazil saw increases in crude steel production of 6.8% and 2.8%, respectively, while China, a major consumer of iron ore, saw an increase of 0.6% in crude steel production.

Supply

From the supply side, BMI expects major iron ore producing regions to remain stable, which will put pressure on iron ore prices to rise.

Production and exports from major iron ore miners are expected to grow or remain largely stable. Despite the impact of severe weather at the beginning of the year, miners still aim to maintain production levels.

In particular, Vale's iron ore production in Q1 fell by 4.5% YoY, but the miner still maintained its production target for 2025 at 325-335 million mt, compared to 328 million mt in 2024.

Although Rio Tinto's shipments in Q1 fell by 9% YoY, the company still maintained its full-year production forecast of 323-338 million mt.

In contrast, BHP expects its iron ore production in the first nine months of FY2025 to increase by 1% to 193 million mt, with full-year production expected to be in the range of 255-265 million mt, compared to a record 260 million mt in FY2024.

In the first nine months of FY2025, Fortescue's iron ore production increased slightly to 143 million mt, and the company expects full-year production to be in the range of 190-200 million mt, compared to 191 million mt in FY2024.

Outlook

In the long term, iron ore prices are expected to show a downward trend, projected to fall from $100/mt in 2025 to $78/mt in 2034.

BMI stated that the contraction in steel production and the growth in iron ore production will lead to a sluggish market.