A massive hit to the iron ore price that has seen it tumble back to the lows experienced in July is re-testing junior miners and the WA Government's budget.
The price of iron ore had remained relatively stable in recent months, but that came to a dramatic halt on Tuesday night as it fell 4.5 per cent to $US45.50 a tonne.
Romano Sala Tenna from Katana Asset Management said falling Chinese steel demand was the major factor.
"The most recent drop has been driven by weakness in the Chinese steel market, we're seeing now that not only [is] the steel production forecast not coming through, we're actually seeing steel declines," he said.
"Year-on-year, pretty much every month in 2015, we've seen a decline in steel production versus the previous corresponding period, and that of course is flowing through to the iron ore price."
Mr Sala Tenna said he did not think the price would revisit healthy levels for some time, with Gina Rinehart's Roy Hill mine set to come online.
"In the short term we're going to see some swings, but it's hard to make a case for seeing it go too much higher," he said.
"The previous thought was $US70, $US80, $US90 was the normal level it would settle at. I think we're now seeing that level substantially lower, I think we will see the iron ore price settle at around the $US50, $US60 a tonne market.
"Hopefully some currency will help the Australian producers to remain profitable."