Economist Andy Xie predicts iron to fall below US$40

Singapore

IRON ore bear Andy Xie is sticking to his guns.

The price will drop below US$40 a tonne before year-end, and trade in the US$30s in 2016 as demand in China sputters, according to Mr Xie, an independent economist who's predicted a collapse since at least 2012. Mills in China will cut output and high-cost iron ore miners will go under, he said.

"The steel industry is reaching a critical point," said Mr Xie, a former Asia-Pacific chief economist at Morgan Stanley. "They'll have to cut production," said Mr Xie, who forecast …