Arrium's shares have slumped after it revealed losses of almost $9 per tonne of iron ore mined and shipped.

The company's March quarter production report shows that its costs had been cut to $66.90 a tonne, but the average price realised for its lower grade iron ore was just $58 a tonne.

Arrium has reacted to plunging iron ore prices buy closing down its higher cost Southern Iron operations, although these were still open for most of the quarter, and focusing on production from its Middleback Ranges operation.

The company is targeting a cash cost from these operations of $57 a tonne delivered into China.

However, given the current level of iron ore prices - $US50.70 ($64.92) for higher grade 62 per cent iron ore on the spot market in Tianjin - Arrium would still be struggling to breakeven.

Excluding all one-offs and lower grade shipments, Arrium said it recovered an average of 86 per cent of the Platts 62 per cent iron ore average.

With those 62 per cent benchmark prices around $65 a tonne that would imply that Arrium could expect to receive around $56 a tonne, still a fraction below breakeven.

A further fall in the Australian dollar would help the South Australian miner, but many analysts expect the price to stay around $US45 a tonne, and the Federal Treasury also expects the benchmark iron ore spot price to fall lower, perhaps to $US35 (approximately $45) a tonne.

Arrium shares were down almost 6 per cent to 16 cents by 11:30am (AEST), off more than 25 per cent so far this year and a lot lower than the highest level over the past 12 months of $1.15.