Iron ore stocks have been hammered today as the price of the commodity dropped to five-year lows.
Shares in Fortescue Metals reached $1.95 in early trade on Tuesday, a fall of 10 per cent.
The company has since gained some ground, trading at $2.03 at the time of publication.
Stocks in the other undiversified miners were also punished.
BC Iron was down 6.6 per cent to 42.5 cents, while Atlas Iron was down 3 per cent to just 16 cents.
It comes as Benchmark iron ore for immediate delivery to the port of Tianjin in China last traded at $US63.30 a tonne, the lowest price since May 2009.
Analysts warn the bottom of the market is yet to be seen, with most predicting the price of iron ore will fall to lows of $US60 a tonne.
This is set to wreak havoc on a sector that has seen the price of iron ore fall by 47 per cent since the start of 2014.
A supply surplus driven by major iron ore expansions by the three majors – BHP Billiton, Rio Tinto and Vale – is only expected to make the situation worse.
Goldman Sachs predicts global surplus will rise from 7 million tonnes this year to 260 million tonnes by 2018.