Iron ore, essential for steel-making, hit a seven-week low as prices dropped amid reduced demand and forecasted increased supplies to China.
On the Dalian Commodity Exchange, the most actively traded September iron ore contract fell 1.84% to 825 yuan ($113.86) per ton, the lowest since mid-April.
Similarly, on the Singapore Exchange, the benchmark price for July delivery dropped to $106.35 per ton.
Analysts, including Cheng Peng from Sinosteel Futures, note several key factors.
Temporary price boosts from stimulus expectations have yielded to sluggish demand and anticipated supply increases in June.
Also, reduced production of hot metal has decreased the demand for raw iron ore. Moreover, growing stockpiles at ports are pushing prices down further.
Analysts at Huatai Futures believe falling iron ore prices may lead steel mills to stock up before the Dragon Boat Festival, stabilizing or raising prices.
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