The price of iron ore has crashed below $US50 a tonne for the first time in nine years.
Iron ore for immediate delivery to the port of Tianjin in China is trading at $US49 a tonne, down 3.9 per cent from yesterday’s close of $US51 a tonne.
All eyes will be fixed on how the market reacts when the ASX opens today, with yesterday’s session seeing miners hammered as a result of iron ore's retreat.
Fortescue Metals Group is trading at its lowest level since March 2007, at $1.90 a share.
Junior miners BC Iron, Mount Gibson, and Atlas Iron are faring the worst, with share prices at 36c, 21c, and 13c respectively – all times lows for the three companies.
The falling price of iron ore has been staggering, and the speed of the price glut has caught many in the industry off-guard.
To put the price dive into perspective, at the start of March, iron ore was trading at $US60 a tonne.
In January 2015, it was trading at $71.26 a tonne.
While this time last year, the commodity was trading at $US114 a tonne.
At a low of $US49 a tonne, only major miners BHP Billiton and Rio Tinto are still making money.
But FMG’s breakeven price is said to be $US57 per tonne, while junior miners are faring even worse.
BC Iron has a breakeven of $US61 per tonne, while Atlas Iron's is $US64 per tonne.
While the price of iron ore will inevitably hurt miners, the Federal budget is also set to take a hit.
The government had expected iron ore to trade at $US60 a tonne in 2015 and 2016.
Deloitte Access Economics director, Chris Richardson said the budget would miss out on more than $3 billion as a result of iron ore’s slump.
A new report out by Deutsche Bank warned iron ore could drop below $US40 a tonne.
Meanwhile Westpac senior economist Justin Smirk predicted the price of iron ore will reach a floor of $US47 a tonne.