The price of iron ore has taken another dive to hit a fresh six-year low.
Iron ore for immediate delivery to the port of Tianjin in China is trading at $US52.90 a tonne, down 2.2 per cent from its prior close of $US54.10 a tonne.
Bloomberg reports this is the lowest the commodity has traded since 2004-2005 based on data from Metal Bulletin and annual benchmarks compiled by shipbroking companies.
Analysts at Citi predict there is more pain to come and expect the price to bottom out at $US50 a tonne.
The retreat comes as China, the world’s number one importer of iron ore, moved to lift its struggling property market.
The People’s Bank of China moved to spur housing demand, having already cut interest rates twice since November.
Many see China’s property market issues as highlighting the country’s slowing economic growth.
This year, China has a 7 per cent growth target, its lowest in 15 years. However some analysts fear it may miss this target.
The president of the China Metallurgical Industry Planning and Research Institute Li Xinchuang recently said annual steel production in the country had peaked at 823 million tonnes last year and would fall to 567 million tonnes by 2030.
This uncertainty is occurring at the same time as seaborne iron ore supply will exceed demand by 55 million tonnes as major miners continue to send out record shipments of ore.