The price of iron ore has fallen to fresh seven-year lows as demand from China slows and surging supplies flood the market.

Benchmark iron ore for immediate delivery to the port of Tianjin in China fell to $US51 a tonne from $US52.90, continuing a run of losses since last week.

It is a record low since The Steel Index began releasing spot prices in 2008.

Prices are down 28 per cent since the start of January, according to the Metal Bulletin.

Predictions from various forecasters including Westpac, Deutsche Bank and others that prices will keep falling – possibly to $US40 – have sparked speculation the Reserve Bank of Australia will cut interest rates again to boost the economy.