Iron ore completed the biggest quarterly loss since at least 2009 as surging low-cost supplies from Australia and Brazil swamp the global market, spurring a glut as demand from China slows.

Ore with 62 per cent content at Qingdao, China, sank 28 per cent since the start of the year, according to daily data from Metal Bulletin. The raw material retreated to $US51.35 a dry metric ton on Tuesday. That's the lowest since 2004-2005, based on data from Metal Bulletin and annual benchmarks compiled by Clarkson, the world's largest shipbroker. Westpac is tipping the price will fall to $US47 a tonne.

The commodity capped a fifth quarterly retreat on Tuesday after Rio Tinto Group and BHP Billiton expanded supply, betting increased volumes would offset lower prices and force higher-cost miners to close. A proposal from Fortescue Metals Group. chairman Andrew Forrest this month for major miners to cap output was rejected by competitors, including Rio. Data showing China is slowing further, with the biggest buyer set for the weakest expansion in a quarter century, deepened the rout.

"There's a bit of a self-destructing behaviour by the big miners," Philip Kirchlechner, former head of marketing at Fortescue and former chief iron ore representative at Rio Tinto in Shanghai, said by phone on Monday. "They're overproducing in the face of slowing demand conditions. And it's hard to understand such behavior," said Kirchlechner, director of Iron Ore Research in Perth, Australia.

Iron ore's plunge since January compares with the 5.6 per cent drop in the Bloomberg Commodity Index and exceeds the decline posted by that gauge's biggest loser, lean hogs. Prices will slump below $US50, according to Citigroup, while Australia & New Zealand Banking Group said that it doesn't rule out a breach of that level in the second quarter.

"Mr Forrest probably does speak the truth, in our view: the Big Miners can influence prices, if they could somehow (legally) act together to restrict supply growth," Morgan Stanley analyst Tom Price wrote in a note, referring to Fortescue, Rio, BHP and Brazil's Vale. The four control about 70 per cent of global seaborne trade, Price wrote.

The lowest price this quarter, posted on Tuesday, is the weakest in daily and weekly rates from Metal Bulletin starting in May 2008. The Clarkson data, which include the cost of delivery to China, cover annual benchmark prices back to 2004.

China set a growth target of about 7 per cent this year, the lowest in more than 15 years, and flagged headwinds including a property slump. Zhou Xiaochuan, China's central bank chief, said on Sunday while growth has tumbled a bit too much, there's scope for policy makers to respond. On Monday, the People's Bank of China lowered the down-payment requirement for second homes and the finance ministry exempted homeowners from a sales tax.

As for iron ore, it will drop below $US50 amid the glut, Justin Smirk, a senior economist at Westpac Banking Corp, said in a report on Tuesday that cut the bank's 2015 average forecast to $US56. Even if all so-called micro suppliers stopped exports, seen as a highly unlikely event, that wouldn't be enough to offset the expected 76 million ton increase from the majors, Smirk wrote.

"We're structurally oversupplied," Dominic Schnider, head of commodities and Asia-Pacific foreign exchange at UBS's wealth-management unit in Hong Kong, said in an interview on Tuesday. "Things do not look good, especially on the bulks side. Somebody probably needs to leave the game."