There's no sign of recovery for the world's top mining companies hit by falling commodity prices.
The global metals and mining market will remain subdued due to slower economic growth in emerging markets, and signs of an oversupply of iron ore and coal, an annual review of the mining industry by PwC shows.
"A slowdown in China's economic growth, to around seven per cent from double digit growth in recent years, is expected to weigh on the industry in the months to come," PwC Australia's energy, utilities, and mining leader Jock O'Callaghan said.
The report shows the overall market value of the world's largest miners fell 16 per cent in 2014, and asset values dropped for the first time in 12 years, though dividend values reached a record high.
Mr O'Callaghan said overall market values had fallen further in the first five months of 2015.
"We would expect it's going to put some pressure on carrying values of assets," he said.
But he predicts companies will improve their operating performance during 2015.
Falling market values are being driven by similar moves in commodity prices, with iron ore, coal, and copper prices falling 50 per cent, 26 per cent, and 11 per cent respectively throughout 2014.
Mr O'Callaghan said China accounted for as much as 40 to 50 per cent of global commodity demand, and slower growth had already had a major impact on demand for iron ore and metallurgical coal, both used to make steel.
"With potentially more weaknesses to come in the real estate market, as well as an overall lower pace of urbanisation, demand could weaken further," he said.
Despite the gloomy predictions, reforms being undertaken in China would place the country in a good position to continue to grow over the long term, he said.
The world's largest iron ore producers - Vale, Rio Tinto and BHP Billiton - are expected to post healthy margins if commodity prices remain low because of the quality of their projects and their focus on operational cuts, PwC found.
Smaller Australian iron ore producers are likely to remain under financial pressure.
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