Iron ore extends new year ascent as slump warnings intensify

SINGAPORE: Iron ore just won’t back down. Prices have advanced to near the highest level in more than two years as speculation of sustained Chinese demand for imports outweighs repeated warnings from analysts that the rally is overextended and will unravel.

“The latest price gains are not sustainable,” said Caroline Bain, chief commodities economist at Capital Economics Ltd, describing the recent advance as very speculative in nature. “It seems likely that it is premised on optimism about demand after the new year holiday,” Bain said in an e-mail, referring to the Lunar New Year which falls at the end of this week.