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Australia cuts iron ore forecast by 33 pct

Xinhua, December 24, 2014 Adjust font size:

Australia has cut its price forecast for iron ore in 2015 by a third to 63 U.S. dollars a tonne from 94 U.S. dollars in September this year.

Australia's Bureau of Resources and Energy Economics (BREE) said on Wednesday that it expected Chinese output to fall in reaction to a glut in the market.

An over supply of iron ore around the world combined with slower demand in China resulted in the price falling nearly 50 percent in 2014.

Throughout the year, iron ore prices have averaged 90 U.S. dollars but in December the price has dropped to 70 U.S. dollars, the lowest since 2009.

"In previous cyclical price troughs, China's high cost production was quicker to exit the market but, after a period of focused cost reductions and efficiency gains, a higher portion of it is withstanding lower prices, albeit still operating at a loss, " BREE said in statement. Endi

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