Goldman Sachs raises Q4 iron ore outlook to $95, but rally unlikely to last as demand uncertainty persists

According to information from Zhihui Finance APP, Goldman Sachs has recently raised its iron ore price forecast. Despite lingering doubts about actual demand in the market, iron ore futures prices have risen for two consecutive days. However, Goldman Sachs also expects that by the end of 2026, iron ore prices will fall back to $80 per ton. The short-term price increase does not indicate long-term strength; this rise is mainly driven by price expectations and short-term sentiment.

Currently, iron ore prices are in a short-term upward trend: the most active iron ore futures contract on the Dalian Commodity Exchange reached 777.5 yuan per ton (approximately $108.70), and the Singapore iron ore benchmark price also edged up to $103.1 per ton. Goldman Sachs has raised its fourth-quarter iron ore price target from $90 to $95 per ton, temporarily boosting investor sentiment.

However, Goldman Sachs also expects that by the end of 2026, iron ore prices will fall back to $80 per ton. Industry experts remain cautious, believing that despite the active performance of the futures market, actual demand from steel producers has not truly recovered. Recently, due to temporary environmental production restrictions in Tangshan, China, steel output has declined, which has also suppressed real demand for iron ore. However, these restrictions will end after September 4, at which point iron ore demand may gain new momentum.

What does this mean?

For the market: Price increases do not indicate long-term strength. The recent short-term rise in iron ore prices is mainly driven by price expectations and short-term market sentiment, rather than substantial growth in steel demand. Unless steel production can rebound quickly, the current price rally may soon lose momentum. Although some steel product prices on the Shanghai Futures Exchange have seen slight increases, the overall upward momentum is weak, and prices of related bulk commodities such as coking coal have already declined. If demand fails to rebound, investors may start to exit the market, putting pressure on iron ore prices.

From a more macro perspective: Policy trends continue to influence the global outlook. China’s steel industry is a key indicator of global commodity demand, and this temporary production restriction policy highlights the significant impact of government intervention on the market. Currently, several major banks still predict that iron ore prices will eventually return to lower levels, which means that market fundamentals may once again become the core factor driving price trends. In the future, iron ore price trends will depend on three key factors: the pace of China’s economic recovery, changes in global construction demand, and new trends in spending in the energy and infrastructure sectors.