The seaborne iron ore market is poised for at least four years of expanding gluts as producers from Rio Tinto Group to Vale SA increase supply to a record just as growth in China drops to the slowest pace in a generation.
Australia & New Zealand Banking Group Ltd. started a second bullion vault in Asia to cater for growing physical demand that the Melbourne-based company sees driving prices as much as 14 percent higher over two years.
Iron ore is poised to decline through the end of March as China, the world’s largest user, has a week-long holiday next month and mills buy more domestic supplies, Australia & New Zealand Banking Group Ltd. said.
Commodities climbed for an eighth day, heading for the longest winning run since 2010, after U.S. Federal Reserve Chairman Ben S. Bernanke said the economy will need accommodative monetary policy for the foreseeable future.
Iron ore will probably fall in the next two months as prices near the highest level since October 2011 discourage buyers in China, the world’s largest importer, according to Australia & New Zealand Banking Group Ltd.