BHP Group Ltd (ASX: BHP) shares and other ASX iron ore shares could be impacted significantly by what happens next with the iron ore price.

There are a number of changes happening around the world, such as the US imposing tariffs on China when the country was already going through difficult conditions with its construction industry.

The iron ore price is key for the profitability of businesses like BHP, Rio Tinto Ltd (ASX: RIO), and Fortescue Ltd (ASX: FMG). Their production costs generally don't change much from month to month or even year to year. Therefore, a change to the iron ore price and revenue is largely an addition or subtraction flowing straight to profit.

So, what could happen next with the iron ore price? Let's have a look at what a leading expert thinks.

Goldman Sachs' view on iron ore

According to the Australian Financial Review, Goldman Sachs commodities analyst Aurelia Waltham thinks the outlook for iron ore may be improving.

Waltham is slightly more optimistic about the iron ore price for the next few months, and she believes the downward pressure on iron ore prices has eased thanks to the US tariff increase on Chinese exports, which was lower than expected. In theory, that might be positive for BHP shares. Waltham said:

As a result, we are raising our near-term iron ore price forecast, now expecting the second-month [Singapore Exchange] contract to average $US100/tonne over the first half of this year, before dropping to just below $US90/tonne by the end of the year.

Our 2025 average price forecast remains $US95/tonne.

The 10 per cent additional tariff on China that took effect on February 4 is below the base case of 20 per cent that was previously factored into our Q1 iron ore price forecast.

Although we continue to expect tariffs on imports from China to rise further, the staggered implementation could support Chinese steel demand for longer than we previously expected.

The AFR reported that Goldman Sachs' base case remains that the yuan depreciates towards 7.50, though the investment bank's foreign currency experts see "merit" in the Chinese central bank's preference to keep the exchange rate stable in the near term.

Due to that, Goldman Sachs decided to increase its forecast for the iron ore price in the first quarter of 2025. A falling yuan is seen as the main drag on iron ore prices in 2025.

Waltham also pointed out that the iron ore price is being supported by disruptions to Australian iron ore supply, and iron ore consumption has reportedly returned to an "uptrend".

However, looking further ahead than this quarter, Goldman Sachs is less optimistic. Waltham said:

While we believe these factors could keep iron ore prices supported at about $US100/tonne in the near term, we remain bearish from mid-2025 onward as a structural decline in Chinese domestic steel demand and new low-cost supply result in a significant build up in iron ore stocks.

BHP share price snapshot

Since the start of 2025, BHP shares have risen just over 1%, Rio Tinto shares have gone up just over 2%, and the Fortescue share price has climbed more than 4%.