The price of iron ore has dived to a new six-year low amid fears it could soon hit $US50 a tonne.
Benchmark iron ore for immediate delivery in China was last trading at $US54.50 a tonne, down 5.4 per cent.
The price of iron ore hasn’t traded this low since the first half of 2009.
The steel-making commodity has lost more than 15 per cent of its value in the last month after dropping 40 per cent during 2014.
The depressed price is being blamed on an excess of supply coupled with waning demand out of China.
Yesterday the Department of Industry and Science released a report which stated a rise in the price of ore this year was unlikely.
“China’s steel consumption growth is forecast to remain lacklustre through 2015, dampening consumption growth for iron ore, while an additional 111 million tons of production is forecast to enter the seaborne market,” the report said
“Some high cost suppliers are expected to exit, but the market is likely to remain oversupplied in the short-term.”
It comes as China downgrades its 2015 growth forecast to 7 per cent, and signalled it would be producing 256 million less tonnes of steel by 2030.
Last week Citi iron ore and steel trading head Mark Lyons said the price of iron ore could fall as low as $US50 a tonne.