Iron ore: Cycles

From $42 to $214: a decade of wild swings

The World Bank's China spot price was $97.70 per dry metric tonne unit in September 2026. That is 5% below a year earlier and 22% below five years earlier. The ten-year range is $41.90 to $214.40. In real 2010 dollars, 2025 averaged $86.30, against $151.10 in 2011. Iron ore tracks Chinese steel output, and Chinese steel demand is now declining. Supply responds slowly because mines need railways and ports. In 1982-88 the benchmark fell every year, ending 32% lower, after mines built for Japan's growth opened as that growth stalled (Humphreys).

Iron ore, cfr spot price

Chart: Iron ore, cfr spot monthly price

Chart: Iron ore, cfr spot annual real price

US price, Average unit value reported by US mines

Super-cycles in iron ore

Iron ore had a long flat era of annual benchmark contracts, then the biggest super-cycle of any major commodity when China's steel output exploded. From 1960 to 2003 the World Bank price stayed between about $9 and $35/t. Between 2003 and 2011 it rose about sixfold, as China's demand outran new Australian and Brazilian supply, and the benchmark system collapsed into index pricing. Since 2014 prices have swung between $40 and $214/t on Chinese stimulus and supply shocks. In real 2010 dollars the price averaged $151/t in 2011 and $86/t in 2025 (World Bank). Falling Chinese steel output and new supply from Simandou point to a lower range ahead.

1. 1973-1988

   Pilbara and Brazilian mines built for Japan's 15%-a-year steel growth came on just as Japan's output stalled after 1973 at 100-110 Mt. Carajas added more supply in the mid-1980s. Exporters' attempt at a cartel (APEF, 1975) failed.

   World Bank annual benchmark price fell from $32.5/t (1982) to $24.3/t (1988), 25% lower, falling in every year but 1985.

2. 2003-2011

   China's steel output boom made it the dominant buyer. Benchmark prices lagged spot, small Indian and Chinese mines sold at spot, and the majors moved to quarterly then monthly index pricing around 2010.

   World Bank annual benchmark $32/t (2003) to $65/t (2005) and $156/t (2008 average); spot monthly average peak $197/t (Mar 2008) and $187/t (Feb 2011).

3. 2014-2015

   A large increase in Australian and Brazilian supply met slowing Chinese steel demand; Fortescue even floated a managed Australian cartel. Steel became 'as cheap as Chinese cabbage' in China in 2014.

   World Bank monthly average from $128/t (Jan 2014) to $40.5/t (Dec 2015), a 68% fall.

4. 2019-2021

   Vale's Brumadinho tailings dam disaster in January 2019 cut Brazilian supply, then Chinese post-Covid stimulus pushed steel output to records.

   World Bank monthly average from $76/t (Jan 2019) to a record $214.4/t (Jun 2021).

5. 2022-2026

   China's property slump cut steel demand, but output held up through exports. After peaks of $152/t (Mar 2022) and $137/t (Dec 2023), monthly prices settled in a $92-109/t range from mid-2024 while the market waited for Simandou and Indian demand.

   World Bank annual average $121/t (2022) to $100/t (2025); $97.7/t monthly average in Sep 2026.

What drives the cycle

• Chinese pig iron output. China makes about 64% of world pig iron (830 of 1,300 Mt in 2025), so its blast furnace utilisation sets seaborne demand.
• Chinese property and infrastructure investment. Construction takes about half of steel, and China's property slump since 2021 is the main drag on ore demand.
• Seaborne supply from the majors and Simandou. Rio Tinto, BHP and Vale controlled 58% of seaborne trade in the mid-2010s. Simandou in Guinea shipped its first ore in December 2025; the SimFer mine alone is rated at 60 Mt/yr (Rio Tinto).
• Supply shocks in Brazil and Australia. Tailings dam failures, cyclones and port outages have caused the sharpest spikes, as in 2019.
• Shift to scrap and DRI. More scrap-based EAF steel in China, and decarbonisation, cut demand for low-grade blast furnace ore and raise premiums for high-grade pellet feed.
• India's steel expansion. India's pig iron rose to about 98 Mt in 2025 and is the main growth market, but it is largely served by domestic ore.

Metrics to track