Late on Wednesday, iron ore through China's Qingdao port was trading at $US55.30 a tonne, down 1.6 per cent from the day before.

Iron ore prices have been falling all week, ending a brief recovery run that took the price close to $US60 a tonne earlier this month. The commodity's price has nearly halved since January.

Iron ore prices have been pushed down over the past few months as the Chinese steel industry's production slowed and companies used up surplus stores while internal competition kept a lid on iron ore's trading prices.

ANZ analysts attributed this week's dip to steel producers having replenished their stocks as well as increasing volume being shipped from Brazil.

"The restocking rally is petering out amid weak demand fundamentals. Chinese domestic hot-rolled coil prices remained at historic lows for a second day on Wednesday, suggesting more downside risk for iron ore prices," ANZ analysts said.

ANZ recently brought forward its peak-steel estimate from 2020 to 2014. 

Low prices forecast

Investment bank Citi is also forecasting low prices for months, with researchers saying it would be "hard to argue that most commodity prices had reached their trough for the year".

Global head of commodities Edward Morse said commodities had underperformed all other asset classes over the past quarter by a large margin, as a weakened appetite in China was compounded by global fears about the Asian superpower's slowing economy.

"Even if China contagion fears have been overblown and a global recession does not unfold, it is clear that growth in China will not continue at the robust pace seen recently and no other combination of emerging markets is likely to pick up the slack, which is likely to adversely impact commodity demand in the near term," Mr Morse said.

Credit Suisse is forecasting Chinese consumption of iron ore will shrink by 10 per cent over the next two years.

Much rests on the sustainability of China's record economic growth rate, which has flagged this year. Even the analysts who are bullish on iron ore cite China's role as the economic engine of the world in their forecasts.

More gradual growth

"Despite the slowdown of the growth speed, China still remains the economic engine of the world," Vale's global director of ferrous marketing and sales, Claudio Alves, told Bloomberg. "China's steel consumption peak is still ahead of us but, of course, the growth will be much more gradual."

Bank of America Merrill Lynch Global Research is forecasting production, and therefore demand and prices, may pick up in the coming quarter despite the ongoing concerns about China.

"Our assessment of steel price dynamics suggests it is likely to stabilise, if not rise, heading into year-end," analyst Adarsh Sinha said.

"The outlook for steel prices from here has become clouded by the various easing measures announced by China – while these have seemingly not helped overall growth, there is evidence of stabilisation in property and infrastructure sectors that are the predominant users of steel."