Iron ore sank back below $US50 a metric ton on speculation that a global glut will persist as China's leading mills group said local steel demand was contracting at an unprecedented pace and supplies from the biggest miners were expected to climb.

Ore with 62 per cent content delivered to Qingdao fell 3 per cent to $US49.95 a dry ton on Wednesday, the lowest price since July 9, according to Metal Bulletin Ltd. The decline snapped the trading range that's held since July 10 of prices between $US50 and $US60. Iron ore last traded below $US50 on July 9 and bottomed for the year at $US44.59 one day earlier on July 8.

Bloomberg