IRON ore extended a tumble to the lowest level in more than five years as declining home prices in China added to concern that an economic slowdown in the biggest buyer would deepen, exacerbating an oversupply. Ore with 62 percent content delivered to Qingdao, China, retreated 4.4 percent to $71.80 (R793) a ton, the lowest level since June 2009, according to data from Metal Bulletin yesterday. It is 47 percent lower this year, heading for the biggest annual drop in price data that started in May 2009. The raw material fell into a bear market this year as BHP Billiton, Rio Tinto Group and Vale boosted output, spurring a global glut just as economic growth slowed in China. Prices might drop to less than $60 a ton next year as output rose further and demand remained weak, Citigroup said. China’s bad loans climbed in the third quarter by the most since 2005, while new home prices declined, according to data this week, spurring speculation the cooling economy would weaken further.
China’s new-home prices dropped in all but one city tracked. – Bloomberg