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Chinese market factors fuel iron ore price slump
Date:5/21/2014 12:15:22 AM Hits:

The return of Chinese domestic iron ore producers to an already over-supplied market and a slowdown in Chinas residential property sector have contributed to the price of iron ore dipping below $100 a ton, according to Australian analysts.

Iron ore, measured out of the Tianjin port in China, lost 2.2 percent overnight on Monday, sliding to $98.50 per ton, its lowest point since September 2012 as a bear market for the commodity threatens billions of dollars in Australian mining revenue.

The bulk metal has slumped 6.6 percent in May and is down 26.6 percent for the year, stemming from fears Chinese demand is being outpaced by increased output from miners globally.

Citi commodities strategist Ivan Szpakowski said the return of Chinese domestic iron ore producers to the market had impacted heavily on supply in the past month.

The slowdown in Chinas residential property, which accounts for 24 percent of steel consumption in the world's second largest economy, has also helped push the price of iron ore down.

Moodys analytics said the construction, sales and outfitting of apartments represented 23 percent of Chinese gross domestic product last year, but China's National Bureau of Statistics has reported a drop in home sales of 18 percent in April and a fall in the value of sales to 418 billion yuan ($71.8 billion). New property construction fell 22 percent in the four months to the end of April.

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