China, the largest importer of iron ore, brought in nearly 1.2 billion tonnes last year, but its steel production is struggling due to a crisis in the property market.

The ongoing collapse of China's property sector has severely impacted consumer confidence and spending, further straining the steel industry.

The head of China Baowu Steel Group has warned that the current situation in the steel industry is worse than during the crises of 2008 and 2015.

A recent survey revealed that only 1.3 percent of China's steelmakers are currently profitable, marking an unprecedented low.

Iron ore prices have plummeted, recently falling below $US90 per tonne, the lowest level in almost two years, driven by a slowdown in China's steel industry.

The Federal Treasury has warned that China's declining demand for iron ore could cost Australia over $3 billion in revenue over the next four years.

China's steel industry, which accounts for 57% of global production, is grappling with weak demand, trade barriers, and significant over-capacity.

Despite calls for a large stimulus package, President Xi Jinping is focusing on an export-led strategy to strengthen advanced manufacturing.

An unprecedented 150 million tonnes of iron ore is currently sitting at Chinese ports, exacerbating supply issues and contributing to price declines.

BHP has expressed confidence that prolonged price dips below $US100 are unlikely, as suppliers are expected to reduce output when prices fall below that threshold.

Treasurer Jim Chalmers noted that the recent fall in iron ore prices underscores the volatility and uncertainty present in the global economy.

Analysts predict that iron ore prices could drop further to $US85 per tonne in the near term, reflecting ongoing market skepticism.