Rio Tinto plan may trigger steep fall in iron ore prices

Iron ore prices may see sharp declines next year as global output surges on the back of Rio Tinto Plc's plan to boost production at its mines, analysts said on Thursday.

"Iron ore output may reach its peak next year as several large mines are expected to start production. The resultant overcapacity will drive down prices," said Liu Zhiqiang, a senior analyst at Sublime China Information Group Co, a commodities consultancy.

Iron ore prices have already fallen to about $55 per metric ton in the past few months and squeezed profit margins for the top global exporters - Rio Tinto, BHP Billiton Ltd, Vale SA and Fortescue Metals Group Ltd.