Iron ore is holding above $US50 a tonne. Just don't bet on it lasting.

Ever expanding supplies from the world's largest producers mean prices will fall through the end of the year, according to Capital Economics. The London-based research firm joins banks including Goldman Sachs and UBS in predicting lower prices.

The steel-making ingredient will drop to $US50 a tonne at the end of September and $US45 by the end of the year, said Caroline Bain, a senior commodities economist at Capital Economics. Ore with 62 per cent iron content advanced 3.9 per cent to $US56.04 a tonne on Friday, according to Metal Bulletin. It's 4.9 per cent higher this month, having bottomed at $US44.59 a tonne on July 8.

"The catalyst for the renewed decline will mainly be on the supply side as the Australian producers continue to ramp-up output," she said. Mining giants Rio Tinto and BHP Billiton are increasing production to boost sales volumes and cut costs, expanding a glut even as China, the biggest buyer, slows.

Then there's new supply due to appear on the market, in the form of ore from Australian billionaire Gina Rinehart's $10 billion Roy Hill mine that will come on line later this year, Bain said. Rio Tinto is forecasting new supply will total 110 million tonnes this year.

Iron ore has got a fillip in recent weeks as steelmakers in China increased output ahead of government-mandated production cuts at some mills to ensure clean air in Beijing for its September 3 World War II victory parade, according to Wu Zhili, an analyst at Shenhua Futures in Shenzhen.

Goldman forecast iron ore averaging $US48 a tonne in the final three months of 2015, according to a report dated August 14. UBS forecast on August 17 that iron ore would average $US51 a tonne in the second half.