At the end of the offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US62.10 a tonne, down 3.7 per cent from its prior close of $US64.50 a tonne.

The percentage decline was iron ore’s steepest since April 29.

The commodity remains more than 35 per cent clear of April’s 10-year low of $US46.70 despite losing 5 per cent over the past three trading days.

A sudden return of pessimism has married with weakening steel prices, which have returned to levels last seen in April.

Steel production is tipped to remain lacklustre through the Chinese summer, which would further raise pressure on iron ore prices.

The commodity had been rising sharply earlier in the month on news Chinese port stockpiles had slipped to an 18-month low and on reports of limited supply of high-grade product.