A Chinese government think tank warns iron ore prices are likely to stay near their current lows for another two years and weak steel demand will keep them under pressure for a decade.
The current oversupply of iron ore is being rectified as high cost miners exit the industry, but it will take one to two years for balance to be restored, the China Metallurgical Industry Planning and Research Institute says.
In the meantime, it expects iron ore to trade between $US55 and $US65 a tonne.
Australia's largest export is currently worth around $US63 a tonne, having fallen from $US139 a tonne in mid-2013.
The institute's President, Li Xinchuang, says the price is unlikely to drop back below the low of $US47 a tonne reached in April, noting most miners would be unprofitable at that level.
"That's the low point for iron ore, according to our research," Mr Li told the Annual Stockbrokers Conference in Sydney.
But he painted a dim outlook for China's steel industry, saying tough competition and falling consumption would hurt profits in the sector over the next decade.
Demand for Chinese steel peaked in 2014, and would continue to slide over the next 15 years, Mr Li said.
That would make thing "very tough" for iron ore miners.
"Because of competition the price of steel will be very very low, which will push the iron ore price also to a low level," he said.
China would lean even more heavily on Australia for iron ore because of the substantial cost advantage BHP Billiton and Rio Tinto hold, he said.
Australia and Brazil, which is home to mining giant Vale, accounted for 77 per cent of iron ore imports to China in 2014, and that would rise to 82 per cent in 2015, Mr Li said.
His comments come after a report by investment bank Goldman Sachs endorsed Rio Tinto and BHP's controversial strategy of ramping up production despite an oversupply in the market.
The report by analyst Christian Lelong said any attempt by the major miners to cut production would lead to inefficiencies in the sector.
Politicians and fellow miners have hit out at the strategy, with Fortescue Metals founder Andrew Forrest unsuccessfully lobbying for a federal parliamentary inquiry into the issue.
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