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“We believe the risks are clearly skewed to the downside,” analysts Christian Lelong and Amber Cai wrote in a report e-mailed today. The New York-based bank has kept its prediction unchanged since March 2013. Ore with 62 percent content delivered to Qingdao in China averaged $99.70 this year.

The steel-making raw material has plunged 48 percent in 2014 as BHP Billiton Ltd., Rio Tinto Group and Vale SA expand output in Australia and Brazil, betting the increase will offset slumping prices and force less competitive mines worldwide to close. A property slump and slowdown in investment growth has set China, the biggest buyer, on course for the weakest full- year growth since 1990.

“The changes in market dynamics following the shift to oversupply have come earlier than we expected,” the analysts wrote in the report headed “The iron ore market presses the fast forward button.”

Ore prices climbed 2.2 percent to $69.98 a dry ton yesterday, halting a two-day retreat to the lowest level since June 2009, according to data compiled by Metal Bulletin Ltd. Prices are set for the biggest monthly decline since May.

For now, the bank said it was keeping its average price forecasts unchanged partly because of the uncertainty related to recent Chinese statistics.

Seaborne Competitors

China reduced its benchmark lending rate to 5.6 percent from 6 percent last week in its first cut since 2012. That came after expansion in gross domestic product cooled to 7.3 percent in the July-September period, the least since 2009, and after a drop in new-home prices and rising bad loans.

Increased competition between suppliers outside of China is becoming more important as the buffer of high-cost, price sensitive mines in the country is depleted and the Chinese cost curve becomes less relevant to prices, the analysts wrote.

As much as 130 million tons of seaborne production capacity, or about 10 percent of current supply, will have to shut in 2015-2016, the bank said. The need to incentivize these closures and project delays outside of China will be the main price driver, it said.

While 2015 may be another weak year as supply rises, prices will climb to average $85, Paul Bloxham, chief Australia economist at HSBC Holdings Plc, said by phone on Nov. 17. Chinese output may slump 30 percent to 236 million tons next year and support rates, the bank said.

Ore will drop into the $50s in the third quarter of 2015 and average $65 for the year as a whole, Citigroup Inc. said in a Nov. 11 report which cut price forecasts. The bear market still has a way to go, according to analyst Ivan Szpakowski.