Goldman Sachs has revised its iron ore price forecast upward for 2026, citing a tighter-than-expected market in recent months. According to commodity strategist Aurelia Waltham, resilient Chinese hot metal production has kept iron ore port stocks stable throughout the June and September quarters. The appreciation of China’s currency since April, along with positive China-US trade relations headlines, has also contributed to price support, with the 62 per cent iron content spot index now at $US106 a tonne.
Consequently, Waltham has adjusted her 2026 forecast upwards. “Reflecting the recent macro support and tighter inventory starting point, we raise our iron ore price forecast to an average of $US93/t in 2026 (previously $US88/t).” However, a bearish outlook is maintained. The investment bank expects the price to decline to $US88/t by Q4 2026 (previously $US80/t) as negative price pressure from micro fundamentals outweighs price support from macro drivers in 2026.
Waltham believes that China’s steel sector has already returned to oversupply, with high inventory and margins declining sharply in recent weeks, which should lead to lower steel production over the coming months. She noted, “While China’s steel exports have remained resilient, their ability to offset domestic demand weakness is diminishing.”
Goldman Sachs expects that China’s net steel exports have peaked. This, combined with a continued decline in domestic demand, will likely weigh on steel production next year. The firm also points out that global iron ore shipments have been up 15 per cent year-over-year so far in Q4, which should exacerbate the seasonal build in port stocks and keep stocks rising throughout 2026.
