The price of iron ore has dropped yet again, falling by 0.6 per cent to $US51.80 a tonne, after remaining stable for the last three days.
Analysts expect it to decline over the coming months due to the market remaining in structural oversupply.
Last month, the metal’s price stabilised after several falls in price, sitting at $US55.70 per tonne after reaching heights of $US70 per tonne in April.
Citi has predicted an average of $US49 a tonne this year, and a fall to $US42 a tonne in 2017; NAB estimates $US40 next year.
However, a more positive outlook was given from Deutsche Bank, with a report indicating that iron ore imports to China last month increased by three per cent compared to April, and had an increase of 16 per cent compared to May 2015, according to The Australian.
“May monthly imports figures were at the highest levels since the start of 2016, pointing to strong demand,” the bank wrote.
“The trend is still positive, suggesting that domestic production has not ramped up that quickly post the winter.”
Boosts in demand signals good news for producers but if it is short-lived, it may cause prices to drop again.
The federal government predicted an average price of $US55 in the May Budget, an optimistic standpoint since the figures were released.