Aust. Govt sees iron ore prices averaging $80/t in 2025

During the current October-December quarter, iron ore prices have been volatile, with prices rising and falling in line with market sentiment associated with economic policy announcements in China, the report said. But over the past year, iron ore prices have tracked downwards on the whole due to the imbalance between supply and demand of the commodity, and this is certain to extend into the next year, the Department said.

On the supply side, Australia and Brazil, the world's two largest iron ore producers, are expected to increase their export volumes by 1.4% and 2.6%, respectively, in 2025 from this year, the report stated. The growth in their iron ore exports will stem from the ramp up of greenfield projects by major Australian miners, and the expansion in production by Brazilian mining companies Vale and Companhia Siderúrgica Nacional.   

For Australia alone, iron ore production is seen climbing by 2.5% on year to reach 982 million wet tonnes in 2025, the report notes.

On the other hand, although global steel demand is anticipated to recover gradually next year, with world steel production projected to rise by 0.9% on year to 1.9 billion tonnes, the world's top steel producer, China, will continue to cut production as the country's property woes seem unlikely to be solved any time soon, according to the report.

As a result, overall demand for iron ore will remain sluggish and weigh on prices for the foreseeable future. The declines forecast in iron ore prices for 2025 will continue in 2026, the Department added, predicting that the spot price for 62% Fe grade iron ore could fall further to an average of $76/t in 2026.

Written by Irene Zhuang, zhuangailing@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com