Bearish Iron Ore Demand Outlook to Drag on Prices in 2025, BMI Says

SEATTLE (Scrap Monster): Fitch's BMI Research maintained its 2025 iron ore price forecast at an annual average of $100/tonne, with prices expected to be weighed down by a subdued demand outlook while remaining supported by renewed optimism over easing trade tensions.

Yet, the brokerage still judges that the balance of risks remains skewed to the downside, with looming steel production curbs in Mainland China tempering positive sentiment.

"Indeed, we expect a sluggish demand outlook, as steel production controls in Mainland China loom large, concerns about slower global growth, including in China, persist and the Chinese property sector remains in the doldrums, acting as a major tempering force for iron ore, looking forward."

That said, China's fresh wave of monetary easing, along with potential trade deal negotiations between the US and China, will work to limit the downside potential, BMI added.

On the supply side, iron ore production remains healthy across major miners, which will work to limit any potential upside for iron ore prices, the brokerage said.

Over the long term, it expects iron ore prices to follow a multi-year downtrend, with prices forecast to decline to $78/tonne by 2034.

Potentially relevant stocks: Century Aluminum, ArcelorMittal, Alcoa, Cleveland-Cliffs, BHP , Vale , Commercial Metals , Rio Tinto , Nucor , US Steel , Steel Dynamics , Kaiser Aluminum .

Elsewhere, U.S. soybean exports are expected to drop 20%, and the prices paid to farmers will plunge if the United States and China fail to resolve their trade dispute, limiting U.S. soybeans from their largest market, agribusiness consultants AgResource told Reuters.

The temporary truce in the U.S.-China trade war, announced on Monday, would not help U.S. farmers revive soy sales in China as Chinese duties, even reduced to 10% from 145%, remained too high to make U.S. soybeans competitive, AgResource President Dan Basse said.

At the same time, U.S. soybean futures on the Chicago Board of Trade could fall as low as $9 per bushel, compared to $10.6 a bushel traded on Wednesday, Basse added.

 Courtesy: www.seekingalpha.com