China's second-largest steelmaker and its partners are mothballing a proposed iron ore project in Australia, the latest casualty of the market collapse that's seen prices hit a record low this month.

A partner meeting in Hong Kong on Monday decided to stop work on the feasibility study for the West Pilbara mine, rail and port project, citing market conditions and uncertainty about future supply and demand, according to the venture's railroad partner Aurizon Holdings Ltd. They agreed to meet around the end of first quarter 2016 to consider the market and the project's status.

Iron ore has sunk 43 percent this year as the top miners in Australia and Brazil pressed on with expansions, feeding a glut as demand in China faltered and squeezing smaller players. The partners Baosteel Group Corp, Posco and American Metals & Coal International and Aurizon had announced in May a deferral of a decision to proceed with the project until late next year subject to market conditions.

"Supply is abundant and there's almost no hope of a demand recovery so most companies won't be enthusiastic about developing or investing in mines," Wu Zhili, an analyst at Shenhua Futures Co in Shenzhen, said. "The low ore price also means it'll make more sense for steel mills to import in the short term than build their own mines."

In the aftermath of the price decline, four iron ore projects, worth a total of about A$17 billion ($12.27 billion), have been removed from the Australian government's major resources project list since April. The collapse has hurt smaller Australian producers including BC Iron Ltd, which this month said it's suspending operations at its Nullagine venture.

The West Pilbara project cost was estimated in 2012 at A$7.4 billion, and Aurizon in August said the company had identified a A$1.5 billion, or 25 percent, cost reduction in the initial capital spending forecast.

"The current market conditions and uncertainty about future supply and demand" were central to the decision of the partners, said Aurizon. The company's Sydney-traded stock fell the most on record after flagging a drop in first-half earnings on one-time charges of as much as A$240 million, excluding any potential impairment for the ore project.

Ore with 62 percent content delivered to Qingdao rose 0.8 percent to $40.80 a dry ton on Tuesday, according to Metal Bulletin Ltd. The price bottomed at $38.30 on Dec 11, a record for daily price data dating back to May 2009.

China's demand is weakening as policymakers seek to steer the world's second-biggest economy away from investment-led growth to one driven by consumer demand and services. When Baosteel and Aurizon took control of the project through a takeover mid-last year, iron ore prices were trading near $100 a ton.

"Some Chinese companies only started looking to develop iron ore mines when prices were soaring and they didn't foresee the extent of declines," Shenhua Futures' Wu said.

Iron ore traded as low as $10.51 a ton in 1988 when annual contracts were negotiated between top miners and some mills, according to data from the International Monetary Fund. That system was superseded by a shift to spot rates as China's demand ballooned, a situation that's now gone into reverse. The commodity climbed to a record $191.70 in 2011, Metal Bulletin data show.

The West Pilbara project has total reserves of more than 2 billion tons and was expected to produce about 40 million tons of iron ore annually, according to its website.