Iron ore extends losses as global surplus builds

Iron ore completed a third quarterly decline in the longest losing streak on record as a slowdown in China's economy curbed demand growth in the largest buyer and worsened a global surplus.

Ore with 62 per cent content delivered to Qingdao dropped 17 per cent this quarter to US$78.05 a dry tonne, according to data from Metal Bulletin. That follows a 19 per cent drop between April and June and a 13 per cent retreat in the first three months. That was the longest run of losses for the steelmaking ingredient since the data series began in 2009.

Prices tumbled this year after BHP Billiton and Rio Tinto Group raised low-cost output, spurring a global glut and prompting the closure of less competitive producers.

The iron ore market is in the midst of a transition without precedent in recent commodity history, with a battle for survival between miners, according to Macquarie Group. A property slump and tight credit conditions curbed demand growth in China.

"We had a very sharp slowdown in steel demand [in China]," said Ivan Szpakowski, an analyst at Citigroup in Hong Kong. "Demand has been very poor and it's yet to really pick up. We're still forecasting a moderate improvement over the next couple of months."

China's economy remained stuck in low gear this quarter, with real estate and retail industries struggling. Policymakers have eschewed broad stimulus measures to revive growth, opting for targeted easing and expedited spending.