IRON ore shipments out of Port Hedland have swollen to another monthly record, underscoring the continued supply surge that has driven down prices this year.

The latest data from the Port Hedland Port Authority showed that 37.5 million tonnes were shipped from the port last month.

The figure set a new monthly record for Port Hedland, which is the world’s busiest iron ore port, eclipsing the 37.4 million tonnes shipped in August. The figure represented a 3.1 per cent improvement from September.

Iron ore prices have fallen by about 40 per cent this year in response to a surge in new supply and a softening in demand out of China, the world’s biggest consumer of the steelmaking ingredient.

The dramatic growth in supply has been led by Australian iron ore producers BHP Billiton, Rio Tinto and Fortescue Metals Group.

The volume shipped last month was up a huge 29.5 per cent from October last year, reflecting the significant rise in production capacity over the past year. BHP and Fortescue are Port Hedland’s key tenants, accounting for the bulk of the ore shipped through the port, while smaller players Atlas Iron and BC Iron also move their material through the port.

The sharp increase in output and the plans of BHP, Rio Tinto and Fortescue to continue increasing their output have drawn criticism from West Australian Premier Colin Barnett, who has accused the majors of trying to squeeze smaller players out of business.

Small West Australian iron ore miner Pluton Resources collapsed into administration earlier this week, following in the path of Northern Territory miner Western Desert Resources and South Australia’s Termite Resources.

The benchmark spot price for ore containing 63 per cent iron was last trading at $US78.63 a tonne. That compares to a peak of $US160.78 a tonne in February last year.