Iron ore prices fell to a seven-week low

The price of iron ore fell to its lowest level since April this year due to falling demand for steel. Iron ore futures on the Dalian Commodity Exchange fell nearly 3 percent last week, hitting $ 68.46 a tonne, the sharpest drop since late April 2015. In addition, the 62 percent Fe ore supplied to Qingdao fell nearly 2.2 percent to $ 61.51 per tonne. This is the lowest level in nearly three weeks.

Large banks are predicting negative factors that could affect the price of iron ore in the future. According to Goldman Sachs Group, an increase in low-cost supply and a drop in demand could lead to further price reductions. China, despite registering a decline in production, is still experiencing a surplus of steel production. At the same time, the consumption of steel in the country has dropped significantly. Low demand for raw materials from the metallurgical industry has led to a free fall in iron ore prices.

According to ANZ Banking Group Ltd, the mood in the iron ore market is weighed down by the sluggishness of the Chinese steel market. The market is likely to show further weakness as it moves during a period of low seasonal demand. In the next few weeks, prices are expected to remain under pressure, ANZ noted.

Meanwhile, Citigroup Inc. forecasts iron ore prices at $ 48 per ton in Q3 of this year, and prices are likely to decline further in Q4, to $ 38 per ton. A sharp decline in Chinese steel fields could cause further declines in iron ore prices in the coming months, according to a Citi research report.

Data released by the China Iron and Steel Association (CISA) shows that in May this year, the country's iron ore imports fell 12 percent from the previous month, to 70.87 million tons. Compared to imports in the same month a year earlier, imports in May were down 8.4 percent. In addition, the consumption of crude steel in the country during the first five months of 2015 decreased by 5.1 percent.