Iron ore prices decline as Apec curbs stunt demand in China

Iron ore prices dropped to the lowest level since September amid a lack of demand in China, with some mills in the world's largest buyer ordered to suspend production before a summit of world leaders in Beijing.

"Demand remains weak as Chinese buyers sit on the sidelines, with many Beijing steel mills forced to halt production leading up to the Apec meeting," Australia and New Zealand Banking Group said in a daily report.

The raw material used for steel collapsed into a bear market this year as Rio Tinto Group, BHP Billiton and Vale expanded supplies, spurring a global glut just as economic growth in China slowed. Asia's biggest economy will host the Asia Pacific Economic Cooperation forum in the capital from November 7-12, prompting authorities to order factory shutdowns to try to ensure clean air and blue skies for the event.

"Steel mills in Hebei have been asked to suspend production due to Apec, which affects iron ore demand temporarily," said Yi Zhu, a Hong Kong-based metals and mining analyst at Bloomberg.

"The mills will resume producing after the conference."

Beijing was China's 29th most-polluted city in the six months to June, according to Greenpeace calculations based on government data. Seven of the 10 most-polluted cities in China are in Hebei, according to the provincial government.