Iron ore price snaps losing streak

The price of iron ore has edged higher, reversing a string of recent declines that has pushed it below $US60 a tonne.

Machinery operates in a pit at Rio Tinto Group's West Angelas iron ore mine in the Pilbara. (Ian Waldie/Bloomberg)

The iron ore price has arrested its string of declines, pausing in the most recent session slightly above its six-week low.

Iron ore inched up 0.2 per cent to $US57.50, from $US57.40 the previous day, snapping a four-day losing streak.

Even so, the commodity has only risen three times in the last 13 sessions as some of the stimulus-fuelled heat comes out of the price, a widely expected development in an oversupplied market.

Analysts widely expect iron ore to drop back to the low $US50s or the $US40s this year and next, with a smaller number of bearish predictions around the $US35 mark over a longer time period.

Although the key export has been surprisingly strong for much of this year, it still remains significantly depressed compared to only a few years ago, as ratings agency Moody’s reminded investors in a wrap of Australia’s earnings season last week.

“BHP Billiton and Woodside Petroleum experienced significant earnings declines for fiscal 2016, due to weaker commodity prices; resulting in a breach of Moody’s tolerance levels for their respective ratings,” Moody’s said.

“However, the ratings agency expects credit metrics to improve to align with expectations as a consequence of commodity price stabilisation and ongoing cost-reduction initiatives.”

Moody’s last month warned that iron ore prices are likely to stay volatile. Its base case for the commodity is set at around $US45 a tonne.

In London trade, BHP Billiton shares added 0.2 per cent, while Rio Tinto fell 0.8 per cent.