The iron ore price has slipped back below the $US50 a tonne level, weakening for the second straight session as one investment bank warned of more pain to come.
Iron ore fell 2 per cent to $US49.20 a tonne, down from $US50.20 the previous day.
The commodity’s reversal from recent strength above $US50 comes as Brazilian iron ore giant Vale said it was prepared for the price to hold at weaker levels.
Vale reported a full-year loss of $US12 billion and said it would sell assets to pay down debt.
The company said it could reach its deleveraging target by 2019 or 2020 if prices held around $US48 per tonne, but added that it had to be prepared for “more unfavourable scenarios”.
Elsewhere, Clarksons Platou analysts tipped prices would ultimately move to the $US30s a tonne range and warned the recent rally was unsustainable.
Iron ore has rebounded from a trough below $US40 a tonne reached late last year. The analysts said prices were likely to stay elevated for a few months on the back of Chinese sentiment, but this was not likely to last given steady steel demand and a looming increase in iron ore supply, Bloomberg reported.