The price of iron ore slumped to a 5-month low Friday, despite data showing Chinese imports of the steelmaking raw material hit a new record in 2013.

The benchmark CFR import price of 62% iron ore fines at China's Tianjin fell to $130.70 a tonne on Friday, a level last seen at the early August and down more than 3% since the start of the year according to data supplied by The Steel Index.

China's imports of iron ore in December fell back to 73.4 million tonnes from November's record-setting pace of 77.8 million tonnes, but for 2013 as a whole imports hit an all-time high of 820 million tonnes.

At 10% growth that's an ever better performance than 2012 when imports grew 8.4%. The rise in imports comes despite Chinese domestic iron ore output climbing more than 8% to 1.3 billion tonnes in the first 11 months of last year.

China now consumes almost three-quarters of the global seaborne iron ore trade which for 2013 is estimated at just over 1.1 billion tonnes as its blast furnace continue to pump out steel at a record-setting rate of 2.1 million tonnes per day, a 9.4% increase over 2012.

Research by Australia's Bureau of Resources and Energy Economics (BREE), the country's official forecaster predicts Chinese iron ore imports will grow 7.4% or more than 60 million tonne in 2014 as high quality ore from Brazil, South Africa and Australia continue to edge out low iron content domestic mining.

But a slowdown in Chinese steel production this year appears inevitable amid overproduction, a crackdown by authorities on the industry over environmental concerns and weaker domestic demand.

Clouding the outlook further is a rise in Chinese iron ore stockpiles to 88.6 million tonnes in December, up a whopping 21% from a year ago and up 26% since January 2013.

Another factor limiting the upside for iron ore is an expected flood of new supply that will overwhelm Chinese demand even if it grows at the same pace as in 2013.

This year the world's top exporter Australia will increase cargoes a whopping 22.1% to 709 million tonnes as projects by Rio Tinto (LON:RIO), Fortescue Metals Group (ASX:FMG) and BHP Billiton (LON, ASX: BHP) come on stream.

Brazil, led by world number one iron ore miner Vale (NYSE:VALE), is set to up exports 9.1% to 352 million tonnes.

India, which has seen exports fall from 120 million tonnes to close to just 11 million tonnes this year, will also re-enter the market as a self-imposed ban on exports expire and stockpiles are sold on.