Iron ore's period of relative price stability has come to an abrupt end as China fears rattle commodity markets.

The price of iron ore at the Port of Qingdao slumped 5 per cent to $US53.28 per cent on Monday as a savage sell-off gripped Asian markets.

It's the first significant fall in commodity's price since early July, when it traded as low as $US44.59. Since then, iron ore has traded in a relatively narrow range compared to the volatility it has experienced through the year.

Expectations remain for iron ore's price to regain its downward march and Australian miners were hit hard overnight as selling swept through European markets.

In London, Rio Tinto was down 6.9 per cent in its largest one-day fall since September 2011, while BHP Billiton slumped 9.2 per cent to post its worst day since November 2008.

BHP is due to report interim results on Tuesday afternoon AEST.

OIL, METALS BATTERED

Oil joined iron ore in taking a hefty fall, with Brent October crude tumbling 6.1 per cent to $US42.69 a barrel, having fallen as low as $US42.51.

US October crude was down 5.5 per cent at $US38.24, its lowest since February 2009.

"Today's falls are not about oil market fundamentals. It's all about China," Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt, told the Reuters Global Oil Forum. "The fear is of a hard landing and that things get out of the control of the Chinese authorities."

Metals also took a beating, with copper and aluminum slumping to six-year lows. Price declines weighed on commodity producers, with the Bloomberg World Mining Index losing as much as 7.5 per cent.

"When the largest buyer of copper and everything is having economic problems, you can expect demand to fall off," Michael Smith, the president of T&K Futures and Options in Port St. Lucie, Florida, told Bloomberg. "The market is in liquidation mode."

Copper for delivery in three months dropped 2.1 per cent to settle at $US4951 on the London Metal Exchange, after touching $US4855, the lowest since July 2009.

On the Comex in New York, copper futures for December delivery lost 2.2 per cent to $US2.248 a pound.

All six main contracts traded on the London Metal Exchange declined, with nickel falling as much as 9.7 per cent.