Iron ore is heading into 2026 with more strength and resilience than many forecasters expected. Despite a softening Chinese property cycle, macro volatility, and changes in global manufacturing patterns, iron ore continues to hold firmly above levels most analysts previously projected. Benchmark prices remain supported by stable steel production, measured increases in global supply and consistent seaborne trade flows.
A new consensus is forming: this is not a temporary spike driven by stimulus headlines or speculative tightening. Iron ore is entering a structurally supported price environment, defined by supply discipline, infrastructure-led growth across emerging markets, and the accelerating premium for high-grade products.
And for Australian miners the implications run far deeper than short-term profitability.
Prices Hold Their Ground Going Into 2026
According to BMI’s latest forecast, iron ore prices are expected to average US$95/t in 2026. This follows an estimated average of US$97/t in 2025, keeping pricing well above long-term historical baselines.
The elevated pricing range is attributable to several factors. Global steel demand remains steady across China, India and Southeast Asia. Major producers in Australia and Brazil continue to operate within long-term output plans. New supply, including early tonnes from Guinea’s Simandou project, is expected to enter the market gradually, with BMI noting that production will begin ramping in the 2025–26 period but increase through staged development.
Despite the introduction of new tonnes, market balance has been maintained. Seaborne iron ore continues to trade within a relatively stable band, supported by consistent downstream consumption and an industrial profile that remains reliant on traditional blast furnace steelmaking. Seaborne trade volumes also remain solid, with Asia representing the largest destination market globally.
For investors, the key takeaway is that iron ore is projected to remain in a high-value pricing environment next year based purely on supply-demand data.
WA Production Base Remains a Global Anchor
Western Australia continues to dominate the global iron ore landscape, accounting for more than half of the world’s seaborne exports. The WA Government’s latest mid-year fiscal update forecasts iron ore royalty revenue of $6.7 billion in FY2025–26, following a forecast $10.4 billion in FY2024–25. The figures reflect standard government budgeting processes and updated price assumptions but sit alongside confirmation that export volumes remain high, mine operations are stable and long-term production capacity is unchanged.
The scale of WA’s iron ore network is a defining feature of the global market. Extensive rail systems link Pilbara mines to major export ports, including Port Hedland, Dampier and Cape Lambert. Multi-decade ore reserves support long-term operational planning. Integrated logistics and automation improve efficiency and shipment consistency. These characteristics position WA as the central supplier in the global iron ore system heading into 2026.
Global Steel Production Continues to Support Demand
Iron ore demand is directly linked to steelmaking, and steel production across major regions continues to underpin seaborne consumption. Chinese crude steel production remains above 950 million tonnes per year, supported by ongoing demand in infrastructure, manufacturing and automotive sectors. While China continues to diversify its sources of imported ore, Australia remains its largest supplier by a substantial margin.
India’s steel industry continues to expand, with capacity additions and new plants contributing to year-on-year growth in output. Southeast Asian economies, including Vietnam, Indonesia and the Philippines, are also increasing steel consumption as construction and industrial activity recover.
These regions form the backbone of global iron ore demand and continue to rely heavily on standard blast furnace production, which uses large volumes of high-grade ore from countries such as Australia and Brazil.
Supply Growth Remains Predictable
Although new supply hubs are emerging, including West Africa’s Simandou mine, industry data shows that global iron ore supply growth is occurring in a measured and predictable manner. BMI notes that major Australian and Brazilian producers continue to maintain steady output and adhere to long-term production plans rather than aggressive expansion cycles.
Simandou is expected to add new tonnes to the market, but the development timeline is phased. The initial commercial shipments are forecast for 2025–26, followed by staged increases in volume. This supports a stable supply environment rather than abrupt changes to seaborne availability.
Predictable supply conditions, combined with consistent demand from Asia’s steel sector, contribute to the balanced market dynamic forecast for 2026.
The BPC View
The latest data shows that iron ore will enter 2026 with solid pricing forecasts, steady demand from major steel-producing regions and stable export performance from Western Australia. The balance between measured supply growth and sustained global consumption provides a strong factual foundation for the sector.
For investors and companies across mining, infrastructure and capital markets, these indicators highlight iron ore’s continued importance in the global resources landscape and reinforce its role as a reliable, large-scale commodity heading into the year ahead.
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