Melbourne

AUSTRALIA cut its iron ore price estimate for next year by 33 per cent as surging output in the world's top exporter outpaces Chinese demand growth, adding to a surplus.

Prices will average US$63 a tonne, the Department of Industry said on Monday. That compares with the US$94 a tonne forecast in September by the Bureau of Resources and Energy Economics, which is now part of the department. The commodity is set to average about US$88 this year, Monday's quarterly report says.