Anticipating global demand for iron ore will dip further in the coming years, JPMorgan Chase & Co. has slashed its own price forecast for the steelmaking commodity by 10 per cent to 15 per cent for the next five years.

Over the next five years, the global financial services firm lowered its iron ore price expectation by six per cent for 2011 to $167.40 per metric tonne, 16 per cent for 2012 to $147.50 per metric tonne, 14 per cent for 2013 to $150 per metric tonne, 11 per cent for 2014 to $125 per metric tonne, and 13 per cent for 2015 to $105 per metric tonne.

"We believe that high-cost Chinese production will keep its place in the market and support prices at above normal levels for some time," the company said in a research report published early this week. "However, we have lowered our demand projections in line with our global economists' estimates of world growth and this results in lower price forecasts."

"The supply-side remains supportive, and supply disruptions and continued delays in projects by the junior miners make us confident that the iron ore prices are here to stay relatively high for a few years," JPMorgan said.

Spot prices for the steelmaking ingredient went crazy in recent weeks, dipping by as much as more than 30 per cent over three weeks and then recuperating about 26 per cent from rock bottom US$116.90 per metric tonne, JPMorgan said.

"Going forward, the recovery and the sustainability of iron ore prices will depend on the strength of recovery in demand from Chinese steel mills, a potential recovery in European steel demand and an overall improvement in the general macro-economic sentiment," it said in the report.

China, the world's second-largest economy, is likewise the world's largest consumer of both steel and iron ore.

But the Asian country reduced imports of the raw commodity to an eight-month low of 49.9 million tonnes in October, 18 per cent less than the 60.6 million tonnes in September. Its economy grew at its slowest since 2009 in the third quarter on weaker export demand and monetary tightening.

However, China is expected to begin restocking bulk commodities in November before ramping production in the new year.