Both ANZ and Goldman Sachs have reiterated predictions that the price of iron ore will drop by at least $US10 per tonne.
Benchmark iron ore for immediate delivery to the port of Tianjin in China was last trading at $US60.60 per tonne, but analysts are predicting a fall.
ANZ says the commodity is likely to fetch $US53 per tonne in coming months, while Goldman Sachs was even more bearish, stating iron ore will average $US49 a tonne in the third quarter.
“Rising supply from Brazil and Australia, which in aggregate account for 80 per cent of seaborne exports, together with subdued demand from Chinese steel mills will once again shift the balance of power from producers to consumers,” analysts Christian Lelong and Amber Cai wrote.
It has been a tumultuous year for the commodity which has seen it fall and rise amid volatility in the market.
Iron ore entered 2015 valued at $US71.26 per tonne after a horror 2014 which saw it lose 47 per cent of its value.
But the price soon started to head south at a pace no one accounted for.
By April 2, iron ore was trading at a record low of $US46.70 per tonne, forcing companies to mothball operations and cut thousands of jobs.
In the same month, from April 16, iron ore made a 33 per cent rally which saw it rise above $US60 per tonne again.
But throughout the rise, analyst sounded cautious warnings that the price hikes would not last – a prediction which looks to be on the money.
The commodity hit $US65 per tonne on June 10, before sliding almost 7 per cent in just 12 days.
ANZ says the price fall comes as data out of China shows construction activity has weakened.
“Despite house prices stabilising and even picking up in some regions, construction activity in China has remained muted. Floor space of newly started housing projects is current down 16% y/y (Jan-May), compared with a fall of 10% in 2014. With a strong build-up in housing inventory over the past 18 months, and the northern hemisphere summer fast approaching, we expect steel demand to remain weak over the next few months,” the bank said.