Iron ore production may scale new peak

Production of iron ore in China, the world's biggest consumer of the key steelmaking ingredient, will climb to a record this year as bigger mines open, adding to a global glut that's depressing prices.

Output of low-grade, unprocessed iron ore may rise 5.6 percent to 1.52 billion metric tons this year, Shi Zhenglei, a Shanghai-based analyst with Mysteel.com, China's largest industry consultancy, said in a phone interview. That's about 400 million tons of seaborne equivalent, he said.

The potential extra production from China comes even as iron ore entered a bear market in March and fell below $100 last month for the first time since 2012 as top miners including Rio Tinto Ltd and BHP Billiton Ltd expanded output. An increase in Chinese iron ore output would weigh on prices and boost steel mills' bargaining power over imports, Shi said.