Iron ore prices that soared amid China's speculative frenzy last month just took another leg down, plummeting as rising port inventories in the top user spurred concern global supplies are once again topping demand.

Ore with 62 per cent content sank 6.7 per cent to $US51.22 a tonne on Monday, taking losses from the peak of more than $US70 in April to 27 per cent, according to Metal Bulletin. The drop, the most since March 9, was preceded by a slump in futures in Asia, with the SGX AsiaClear contract falling as much as 6.3 per cent to $US45.72 as futures in Dalian closed at the lowest since February.

Ore with 62 per cent content sank 6.7 per cent to $US51.22 a dry metric ton on Monday Credit:Jacky Ghossein

Iron ore has been on a tumultuous ride this year as investors sought to gauge conflicting economic signals from Asia's biggest economy against still-elevated port stockpiles. In China, traders piled into raw-material futures including iron ore in March and April, helping to boost prices, only to switch track when regulators clamped down. Inventories at ports have climbed above 100 million tonnes, offering fresh evidence of increased supplies from Australia and Brazil, and BHP forecast last week that there may be further increases.

"Stockpiles have once again broken the 100 million tonne-level, indicating that supply pressure has increased significantly," Fan Lu, an analyst at Sinosteel Futures, said in a note on Monday. "Mills' margins have narrowed as steel output recovered," suppressing demand for iron ore, she said.