BEIJING analysts are pessimistic about the future movements in the iron ore price, despite economic growth in China predicted to be about 7 per cent next year.

Independent iron ore researcher Li Ji said the current iron ore oversupply hitting the world’s markets and reduced Chinese demand meant the commodity’s price was unlikely to ever reach its previous peaks.

China last week had an estimated 99.04 million tonnes of iron ore on hand at 33 major ports across the country, which is the lowest level since February.

“I don’t think we will ever see a price of $US180 a tonne again in the next 10 years,” Mr Li said.

“There is a serious supply and demand imbalance in the world right now. The capacity of the ¬Chinese steel mills is increasing only very slowly while the output of foreign miners have risen by 100 million tonnes.

“I think it’s not out of the question that iron ore will drop down to $US50 a tonne.

“There are already some suggestions in the ¬future markets that it could be headed towards those levels.”

Lange Steel Information Research director Zhang Lin said it was unlikely that steel demand and manufacturing output in China would support a rebound in the iron ore price in the next year.

“I’m pessimistic about the price of iron ore in the future,” Mr Zhang said.

“The government is emphasising environmental protection and as a result the steel market in China is going to remain stagnant.

“We cannot see any signals coming out that indicates the iron ore price is going to start growing again any time soon.”

Mr Li said he believed it was unlikely that Chinese steel mills would move to increase their iron ore stockpiles, given the industry’s output was expected to fall further next year.

Chinese iron ore inventory levels had been above 100 million tonnes each week since February until the sharp decline last week.

“I don’t think we are going to see much more buying on the spot market because the demand from the steel mills is limited and the stockpiles are already pretty high,” Mr Li said.