Iron ore is inching back towards $US100 a tonne level after defying bearish predictions for the best part of the year, amid signs of weakening demand in China and imminent shipments from Rio Tinto’s giant Simandou project.

Futures for Australia’s key export tumbled nearly 5 per cent last week – the steepest sell-off since February – and continued their descent on Monday to $US101 a tonne. Commodity strategists have long been predicting iron ore to trade below $US100, a key psychological level for the market.