Iron ore price to remain between $80-100 amid demand slump, supply growth

Global iron ore prices are likely remain between $80 and $100 per tonne due to tepid demand and growth pangs. The weakness is expected to sustain over the next 18 months, according to a Moody’s Ratings report on Metal & Mining.

Moody’s estimates that the range-bound price will limit the earnings growth of large producers, but even if prices drop below $80 per tonne, they will continue to operate profitably, benefiting from their low production cost.

Major sectors, such as real estate and automotive, that drive steel demand are experiencing a decline in activity, tamping down global steel and iron ore demand.


The demand for steel and iron ore is also likely to remain weak due to “China’s structural decline in steel production amid a slow property market recovery and likely reduced export demand because of rising trade tensions and tariffs,” the report states.

There is also increasing demand for higher-grade ore as steel makers pivot towards low-emission technology.

With a few markets, such as India, the Middle East, and Africa, likely to drive up demand for iron ore, “the decline in demand from China, the world's largest consumer, will continue to constrain global iron ore demand in 2025,” the report underscores.

While the demand for iron ore may dampen, supply will remain robust as major producers invest in new and existing mines.

“New projects in frontier regions, like Simandou in Guinea, will also boost global supply. New supplies from Africa at competitive cost could also lower global prices if large-scale projects enter the market,” Moody’s said while adding high-cost producers may exit the market if prices go below $80-$90 per tonne.

Further, demand for lower and higher grade iron ore will move in different directions.

“Demand for higher-grade iron ore, suitable for lower-carbon steelmaking, may rise as integrated steel producers pursue BOF optimisation and shift toward cleaner technologies,” the report notes.