"Despite the collapse in iron ore prices last year, the majors increased output to lower breakeven costs and squeeze marginal producers," wrote Meir. "In the case of steel, Chinese production is moderating on a year-over-year basis, but steel mills are still cranking out too much metal, leaving many to look to the export market for relief."

Hurt by a housing slump and industrial overcapacity, China's economy is likely to have expanded in 2014 at the slowest pace in more than two decades, according to a Bloomberg survey. The central bank cut interest rates in November for the first time since 2012 to boost growth in the second-largest economy.

Iron ore exports to China through Australia's Port Hedland, the world's biggest bulk-export terminal, rose to 30.6 million tons last month from 29 million in November, according to port data. Brazil, the biggest exporter after Australia, shipped the most iron ore in December since 2005 as Vale SA boosted output.

Inventories at Chinese ports declined for a sixth week to 100.6 million tons as of Jan 2, the lowest level in almost 11 months, according to Shanghai Steelhome Information Technology Co.