Iron ore prices remained stable in the first quarter of 2025, averaging around $104 per tonne, primarily driven by supply disruptions amid sustained demand.

Recent Price Trends

Over the past 12 months, iron ore prices fluctuated between $90 and $120 per tonne, peaking in May 2024 and hitting a low in September 2024 amid macroeconomic concerns.

Market Outlook for 2025 and Beyond

UBS analysts expect global steel and iron ore markets to experience a moderate surplus in 2025, similar to 2024. However, the bank forecasts a more significant surplus in 2026 and 2027, particularly driven by increased production from the anticipated ramp-up of the Simandou project.

“As a result, we continue to anticipate iron ore prices to trend lower over the medium term,” analysts led by Myles Allsop wrote in their note.

Supply-Demand Fundamentals

• Moderate Surplus in 2025:
  UBS forecasts a moderate surplus, with demand contracting by approximately 20 million tonnes (Mt) and supply increasing by a similar amount.
• Larger Surplus in 2026-27:
  A more substantial surplus is expected as supply could expand by roughly 60 Mt annually in these years.
• Demand Dynamics:
  Demand is projected to slightly decrease each year from 2025 through 2027, though sustained steel production growth in India and Southeast Asia may partly offset declines in China.

Supply Forecast Adjustments

Meanwhile, analysts have revised downward their 2025 supply growth forecasts due to weather-related disruptions and project delays, predicting only a modest 20 Mt increase. However, supply expansion is expected to accelerate in 2026-27, driven by new projects in Australia, West Africa, and Brazil.

Price Projections

Looking ahead, UBS projects average iron ore prices at approximately:

• 2025: $100 per tonne
• 2026: $95 per tonne
• 2027: $90 per tonne