The price of iron ore has hit a fresh five-and-a-half-year trough overnight as 2015 shapes as another challenging one for those in the sector.

At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US62.80 a tonne, down 0.8 per cent from its previous close of $US63.30 a tonne. The price is now at its weakest point since the middle of 2009.

Already the commodity has lost about 12 per cent since January 1 on the back of a horror 2014, which saw its value slashed by almost 50 per cent. Last night's losses extended iron ore's losing streak to seven consecutive trading sessions and leaves it with just one positive day of trade in the past 15 as investors expect an oversupply to hang over the market for at least the next couple of years.

Last night's deterioration in the price of the commodity will likely place further pressure on mid-tier miners in the sector during local trade today after Fortescue Metals Group bounced off a five-year low late in yesterday's session.

Overnight, BHP Billiton and Rio Tinto lost 1 per cent and 0.5 per cent, respectively, in London trade, which was largely in line with the broader market.

The three-week slump in iron ore has come as leading investment banks downgrade their forecasts, with Goldman Sachs, Citi, Macquarie and UBS all lowering their price expectations this year.

According to Goldman, iron ore will likely average $US66 a tonne this year, a sharp cut to its previous forecast of $US80 a tonne. The commodity is then expected to extend falls in 2016, sinking to an average price of $US61 a tonne.

The most bearish of the group is Citi, which has an average price forecast of $US58 for 2015.