Benchmark 62% Fe iron ore CFR China is trading at approximately $95/t in late June 2026, down from a mid-May peak of $115/t and consistent with the broader bearish consensus that sees prices averaging $94-95/t for the full year.
Chinese port inventories reached record seasonal highs in June 2026, reducing the urgency for steel mills to seek fresh cargoes. This inventory overhang acts as a cap on price rallies.
China's steel consumption is deteriorating. Apparent consumption of five major steel products declined 3.1% week-on-week in early June. Property and construction remain the weak link with no strong policy signal for a sustained recovery. Wood Mackenzie projects Chinese steel demand declining 5-7 Mt per year over the next decade.
On the supply side, Guinea's Simandou project is adding high-grade ore to the seaborne market, with about 20 Mt expected to reach China in 2026. Major Australian and Brazilian producers remain stable within long-term output plans.
The analyst consensus for 2026 centers on $94-95/t, with a working range of $80-100/t. Citi is most bearish at $85/t, Vale at $100/t. Goldman Sachs forecasts $93/t, JP Morgan $95/t, Fitch $90/t. SGX December 2026 futures trade at about $95/t.
New steel export licensing from China, effective January 2026, adds downside risk. If strictly implemented, export restrictions would reduce blast furnace operating rates and iron ore demand.
The grade shift toward higher-Fe ore driven by decarbonization is a developing trend. Simandou is well-positioned to serve this market segment. Price spreads between grades could widen.
Iron ore procurement teams should plan around mid-$90s/t for full-year 2026 while stress-testing budgets at $80/t bear and $105/t rally scenarios.
Weak-demand, high-inventory, supply-heavy environment. Consensus at $94-95/t average for 2026 with a realistic $80-100/t band. Core procurement strategy: index-linked or floating formulas tied to 62% Fe benchmarks with optional tranches to capture potential dips below $90/t. Avoid panic restocking on short-term rallies above $105/t, high port inventories will cap upside. Explore trial cargoes of Simandou high-grade ore for blast furnace productivity benefits.