The price of iron ore has fallen below $60 a tonne as China revised its growth forecast to just 7 per cent.
Benchmark iron ore for delivery to the Port of Tianjin was last trading at $59.30 a tonne, a fall of 4.5 per cent. The last time iron ore was valued in the $50 range was back in 2009 during the global financial crisis.
The price crash comes as Chinese Prime Minister Li Keqiang told the National People's Congress that the country’s economic development had entered “the new normal”.
“Our country is in a crucial period during which challenges need to be overcome and problems need to be resolved,” Li said.
As such, growth for 2015 has been reforecast to 7 per cent, the lowest for around 15 years.
This means the world’s biggest importer of iron ore will transition away from the fast-growing model of development to a more moderate scheme.
The move comes at the same time Pilbara Ports Authority announced iron ore exports for February were 28 per cent higher than in 2014 at 35.6Mt.
The results come as no surprise, with major miners BHP Billiton, Rio Tinto, Fortescue Metals Group all adding extra tonnages and reporting record shipping rates.
It is this ramp up that is being blamed for the fall in price of iron ore, with more supply on the market than it can absorb.
In January, Citigroup predicted the price of iron ore would fall to $58 a tonne.
Meanwhile, former Morgan Stanley strategist Gerard Minack said he expects the price of iron ore to drop to half of its current price.
“In the boom all the other commodities went up six- or sevenfold, while iron ore went up 15 times,” Minack said.
“So, sure, it’s halved already, but it has further to go.”