The paper proposes a novel automatic adaptive iterative edge-smoothed finite element (ES-FE) analysis method that effectively captures the collapse load limit of ductile structures under statically applied forces. Underpinning the algorithm is the implementation of a so-called modified elastic compensation method, one of a wide class of modulus variation techniques. It performs iteratively a series of standard elastic ES-FE analyses, where each run appropriately adjusts the values of elastic moduli associated with those critical elements identified by the intensity of individual stress resultants, to converge the collapse load solution. The computationally efficient automatic adaptive ES-FE construction is incorporated directly within the iterative elastic modulus variation framework. It employs a modulus compensation rate error indicator that categorizes for every iteration the yield locations requiring specially treated non-uniform mesh refinements. The robustness and accuracy of the proposed analysis scheme are illustrated through good comparisons with available benchmarks as well as some practical engineering mechanics applications with complex geometry, where the non-uniform mesh constructions importantly enhance the solution processes. These demonstrate the efficiency of the algorithm in capturing the collapse load solutions at modest computing efforts.