Goldman Sachs has adjusted its 2027 price projection for iron ore with 61% iron content to $92 per metric ton, down from a prior forecast of $96 per ton. The revision follows a recent drop in spot prices below $90 per ton, the first such move since 2024.
The bank attributes the downgrade to a market that is moving toward greater balance, driven in part by shrinking steel production. Through the end of September, Chinese steel output declined 3% year-over-year while global steel production fell 2% year-over-year, factors that Goldman identifies as weighing on demand for iron ore.
At the same time, Goldman points to improved seaborne supply from large miners in Australia and Brazil as another source of downward pressure on prices. The combination of softer demand and increased shipments has contributed to the recent price weakness.
Goldman also highlights new and expanding sources of supply that are shaping the outlook. Additional output from the Simandou mine in West Africa and ongoing market activity involving China Mineral Resources Group (CMRG) are cited as elements that add to the market challenges the bank expects to persist through 2027.
The firm anticipates that CMRG's role in the market will continue to strengthen over time. Goldman warned that this dynamic could result in value leakage from major Australian iron ore producers to Chinese steel mills, estimating the potential increase in leakage could be as much as $10 billion.
Goldman's forecast and commentary specifically apply to the 61% Fe benchmark, the reference grade of iron ore used in its projection. The bank's outlook frames an industry landscape where weaker steel production, enhanced seaborne shipments, and newly emerging sources of supply all contribute to a more challenging market across 2027.
The implications outlined by Goldman touch on pricing for benchmark-grade material and the distribution of value along the iron ore supply chain, particularly between large Australian producers and Chinese steelmakers.