The BHP Group Ltd (ASX: BHP) share price soared from late October through to the end of 2023.

Between 23 October and 28 December, shares in the S&P/ASX 200 Index (ASX: XJO) iron ore miner rocketed 17% to $50.72 apiece.

This came amid a surge in the iron ore price, BHP's largest revenue earner.

Iron ore leapt from US$114 per tonne in late October to trade for US$140 per tonne at the beginning of 2024.

Since then, it's been mostly downhill for the steel-making metal, with iron ore futures dropping to US$98 per tonne on Thursday before rebounding to US$102.80 per tonne earlier today.

As you'd expect, the big drop in 2024 has also put pressure on the BHP share price. Shares in the ASX 200 miner are down 12.4% in 2024.

While BHP also derives significant revenue from copper, alongside other important revenue streams from coal and uranium, the miner's share price performance – and future dividend payouts – are clearly closely linked with the iron ore price.

With that said, what can ASX 200 investors expect from the iron ore price in the year ahead?

For the six months to 31 December, BHP produced 129 million tonnes of iron ore, selling it for an average realised price of US$103.70 per wet metric tonne. That saw the miner rake in earnings before interest, taxes, depreciation, and amortisation (EBITDA) of US$9.7 billion from its iron ore division, up 27% year on year.

With that in mind, the BHP share price could continue to struggle to match its late 2023 performance if iron ore prices remain near current levels.

Which is precisely what Caroline Bain, chief commodities economist at Capital Economics, is forecasting.

"Given subdued demand, regional steel prices are likely to come under downward pressure this year. We expect prices in China to fall as supply continues to outstrip domestic and foreign demand," Bain said (quoted by The Australian Financial Review).

Capital Economics forecasts the industrial metal will trade for US$100 per tonne at the end of the current quarter, where Bain also expects it to end the year.

2025 could be an even tougher year for the BHP share price to deliver outperformance, with Bain forecasting iron ore will fall to US$85 per tonne by the end of next year.

That's largely based on her expectations of ongoing weak demand for steel from China and much of the rest of the world.

She said of the world's largest economy: "In the US, steelmakers plan to expand output, but we think demand will be weaker than they expect."

As for Europe, Bain said: "Lower interest rates will only offer scant support to prices in Europe as economic growth remains weak."

She believes that China, the world's largest iron ore importer, is unlikely to offer any relief as the nation's steel-hungry property sector continues to struggle.

According to Bain (quoted by the AFR):

The correction in the construction sector and steel demand is inevitable and is only delayed through policy support.

Property activity is likely to halve by the end of the decade, with average annual falls of 10%, causing similar falls in construction inputs like steel. Overall, we expect steel consumption to be flat in 2024 and fall by 0.5% in 2025.

At the current BHP share price, the ASX 200 miner trades on a fully franked 5.3% dividend yield.