This week, global iron ore prices rebounded by 4% to reach $96 per ton, a rise attributable to strong steel production and consumption in China, as well as an unexpected surge in imports from India, which have provided solid support for prices in the $95–$100/ton range, said Goldman Sachs in a research note this week.
However, growing supply from major global miners such as Australia and Brazil is creating resistance, making it difficult for prices to sustainably break through the $100/ton level, the bank said, forecasting that iron ore prices may fall back to $90/ton in the fourth quarter.
Goldman Sachs maintains its view that current iron ore consumption levels in China can support prices around $95/ton, but heading into the fourth quarter, iron ore may come under downward pressure and retreat to $90/ton.
The report highlights that the 62% Fe iron ore index price surged 4% over the past week, returning to the $96/ton level, and the rebound is not without justification—it is supported by solid demand fundamentals.
First, thanks to stable manufacturing performance and strong steel exports, China’s iron ore consumption remains high, the report noted.
According to data from Mysteel, the daily average iron ore consumption across 247 steel plants in China is currently 3% higher than in July 2024, and at the same time, steel mills’ iron ore pickup volumes from ports remain elevated, and port inventories declined during the second quarter—all confirming strong demand.
Goldman maintains its view that Chinese consumption at current levels supports prices around $95/ton.
Second, lower iron ore prices have led to a surge in Indian imports, bringing the country’s net exports down to zero, and it poses a potential upside risk to Goldman Sachs’ previous iron ore price forecast for 2026, which had assumed that India would only become a major net importer by Q4 2026 when seaborne prices dropped to $80/ton.
In addition, market attention on China’s supply-side reform in the steel industry has also played a supportive role. Goldman Sachs noted that this expectation has improved long-term profit outlooks for steel mills, making them more willing to accept higher raw material prices, and has also led to some short positions in the market being covered.
Data shows that global supply is steadily increasing. Based on high-frequency shipping tracking data, in June this year:
- Australia saw a 3% year-on-year increase in shipments, equivalent to 2.5 million tons, mainly driven by the ramp-up of production at Mineral Resources’ Onslow project.
- Brazil’s shipments rose by 3% year-on-year, or 900,000 tons.
- Canada recorded a sharp 17% year-on-year increase, reaching 800,000 tons.
- South Africa also increased by 8% year-on-year, or 300,000 tons.
These collective supply increases have effectively offset the disruption in Peruvian supply caused by port infrastructure damage (Peru’s June shipments were zero, compared to 1.5 million tons in the same period of 2024), and the result is a surge in iron ore arrivals at Chinese ports, further solidifying a picture of abundant supply, according to the report.
Although short-term demand remains strong, the report emphasizes that global supply growth will act as a ceiling on prices, making it difficult for iron ore to consistently remain above $100/ton. In the fourth quarter, iron ore may face downward pricing pressure and fall back to $90/ton.
