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MOST active iron ore futures in Singapore sank below $40 a metric tonne for the first time on concern that the economic slowdown in China will cut demand as supplies from the largest miners climb.

The SGX AsiaClear contract for January fell 2.6 percent to $39.74 a tonne at 2:38 pm in Singapore, heading for the lowest close since trading started in April 2013. On the Dalian Commodity Exchange, futures for May delivery sank as much as 3.1 percent to 293 yuan ($45.81) a ton, a record low.

The raw material has been pummelled since the start of 2014 as surging supplies from low-cost producers including BHP Billiton Ltd and Rio Tinto Group in Australia and Brazil’s Vale SA combine with faltering demand in China to spur a glut. Losses in Singapore and Dalian could presage a drop in the benchmark price for spot ore in Qingdao, which will be updated later in the day. The latest sign of new supply came from Australia, with a vessel waiting offshore on Monday to load the first cargo from Gina Rinehart’s Roy Hill mine.

“Supply continues to rise while port inventories are starting to climb, weighing on iron ore prices,” analysts at Maike Futures Co. said in a note on Monday.

“The overseas producers are still profitable and are greatly reducing costs.”

Steel Production: The top miners are betting that higher output will enable them to cut unit costs and defend market share while smaller rivals shut. Mills in China, contending with overcapacity and depressed margins, will cut steel production by almost three percent next year, according to the China Iron & Steel Association.Ore with 62 percent content delivered to Qingdao rose 1.2 percent to $44.50 a dry ton on Friday, according to Metal Bulletin Ltd.

The price bottomed at $43.89 on November 24, a record for daily price data dating back to May 2009. Rinehart’s $10 billion operation, which targets annual production of 55 million tons, missed an initial deadline to begin shipments earlier this year. The Capesize carrier Anangel Explorer, anchored offshore, will be loaded with the first cargo from the mine, Roy Hill Holdings Pty confirmed in an e-mail.

While Citigroup Inc. has forecast the mine’s new supply will contribute to a further slump, the producer has said almost 90 percent of its output is under long-term contracts and that it won’t pressure prices. Australia & New Zealand Banking Group Ltd. said it’s the pace at which the project comes on stream that will determine the impact.

Inventories at ports in China have expanded in six of the past seven weeks to the highest level since May. Holdings rose 1.8 percent to 87.65 million tons last week, according to Shanghai Steelhome Information Technology Co. Miners’ shares dropped in Sydney. BHP, which is also facing the fallout from a burst mine dam in Brazil, shed 3.6 percent to A$18.09, the lowest close since 2005. Rio lost 0.7 percent, retreating for a seventh day, as Fortescue Metals Group Ltd. fell 4.9 percent. The trio are Australia’s biggest shippers. — Bloomberg