BMI, a Fitch Solutions company, is revising down its iron-ore forecast to an average of $99/t from $101/t previously, noting that strong downside risks remain as weak mainland Chinese activity dampens market sentiment and demand.

The company reports that mainland China’s property and infrastructure sectors are unlikely to rebound over the last few months of this year.

Despite a decline in steel production growth in mainland China, the report also highlights that a similar decline in domestic iron-ore production and lower grades of ore extracted locally could ensure that imports remain strong in the immediate months of this year.

BMI says a resilient global economy will continue to support Chinese steel exports. However, the company notes that, over the long term, iron-ore prices are expected to follow a multi-year downtrend, with prices forecast to decline to $78/t by 2034.

“We expect iron-ore prices to settle at a [yearly] average of $99/t in 2026, as weak mainland Chinese activity pressures demand and sentiment.

“Iron-ore inventories across 45 major mainland Chinese ports as of August 14 stood at 166-million tonnes, near-record highs. We expect iron-ore prices to remain under pressure in [the third quarter of] 2026, as global supply remains healthy with the new Simandou [iron-ore] project in Guinea and strong production from global majors,” BMI says.

The company highlights that mainland China’s official non-manufacturing Purchasing Managers’ Index (PMI) fell to 49 points from 50.2 in June, with weaker construction activity and amid an underperforming property sector.

BMI adds that China’s July Politburo meeting offered no reprieve for ferrous metal markets as the Chinese government showed increasing signs of tolerance towards a lower economic growth trajectory.

No stimulus measures were announced towards construction, whether property or infrastructure related, the report says.

“We do not expect a significant crash in the coming months, owing to strong mainland Chinese imports. In the first seven months of 2026, China imported 736-million tonnes of iron-ore, marking a 5.9% increase compared to the same period in 2025, despite weakening domestic crude steel output and a prolonged slump in the property construction sector,” BMI highlights.

Outside of China, the company notes that steel production and demand were muted in 2025 and for most of the first half of this year. However, on the supply side, it says iron-ore production remains healthy across major miners, with iron-ore shipments and production broadly increasing and remaining largely unchanged as miners aim to maintain their production levels.

Beyond this year, BMI says iron-ore prices will consistently trend downwards, as constrained steel production growth and higher iron-ore output continue to ease the market.

“China’s slowing demand growth will be the main driver of lower prices. A negative shift away from industrial, steel-intensive sectors towards services and less steel-intensive infrastructure will have a negative impact on iron-ore demand,” the report concludes.