Iron ore enters H2 2026 at approximately $108/tonne, down 5% year-over-year, as China's steel production cap at 1.02 billion tonnes limits demand growth. The 62% Fe CFR China benchmark price has traded in a $95-120/t range through H1.
Australian exporters (Rio Tinto, BHP, Fortescue) are forecast to ship a combined 900 Mt in 2026, at or near record levels. Rio Tinto is guiding 323-338 Mt, BHP 253-268 Mt, and Fortescue 195-200 Mt. No major capacity expansions are planned.
Vale's production is recovering at 370 Mt, up 5% year-over-year, as the Serra Norte and Serra Sul systems ramp. The company maintains its 340-370 Mt guidance for 2026, with upside from the Northern Complex debottlenecking.
Chinese port inventories sit at 140-150 Mt, elevated but manageable. Steel mill inventories are lean at 25-30 days of consumption, leaving mills vulnerable to supply disruptions.
Price projections for H2 2026 cluster at $100-120/t.
Iron ore buyers should maintain flexible procurement with quarterly contract reviews. The China steel cap creates a price ceiling, but supply disruption risk (weather, rail) provides a floor. For Chinese mills, consider index-linked contracts with a $95-125/t collar. Budget $95-125/t for 2027.