UPDATE 2.20pm: Australia's biggest mining companies are being battered as the price of iron ore hits a one-year low on worries about an oversupply in China.
Iron ore-focused mining houses such as Rio Tinto and Fortescue Metals Group have taken a pounding in recent weeks, with the price of the steel-making ingredient sliding 20 per cent to $US100.70 per tonne.
Steel prices have also hit 12-month lows and traders predict more price falls in the short term.
Some analysts believe Australia's most lucrative trading commodity could slump to September 2012 levels of around $US86 a tonne.
"At a time when there are question marks over the robustness of the Chinese economy and particularly its steel industry and its demand for steel, it's not surprising that we've seen the iron ore price retrace as it has," Mine Life Resources analyst Gavin Wendt said.
"If market sentiment stays where it is, we could see prices down at $US90 a tonne."
He said there was more iron ore being produced in the Pilbara than ever before and supply was catching up with demand.
Volatile iron ore prices regularly track the perceived health of the Chinese economy.
Fortescue Metals Group, a pure play iron ore miner, has endured a 22 per cent fall in the company's share price over the past five weeks.
And accompanying revenue falls could affect the speed at which the company repays its large debt.
Meanwhile Rio Tinto shares are seven per cent lower while diversified miner BHP has escaped with just a two per cent drop during the same period.
Smaller Pilbara iron ore miners have not been so lucky.
Atlas Iron and BC Iron share prices have dropped 28 per and 27 per cent falls respectively since early April.
CMC Markets chief strategist Michael McCarthy said despite the dominance of spot prices, Chinese buyers often pulled back at this time of year to support their contract negotiations.
"Technically, it does look weak and it has continued to trend down for the last two weeks," Mr McCarthy said.
"It does look like it might head for a test of that September 2012 low of around $US86."
Investors and analysts will be carefully watching the release of Chinese manufacturing figures on Thursday for indications of further price falls.
At the close today, FMG was off 21 cents, or 4.59 per cent, to $4.37, Rio Tinto had shed $1.85, or 2.99 per cent, to $60.10 while BHP was 65 cents, or 1.71 per cent, lower at $37.43.