Just days after hitting a four-month high, the price of iron ore has fallen below $US65 per tonne.
Benchmark iron ore for immediate delivery to the port of Tianjin in China was last trading at $US64.50 per tonne.
It comes as data out of China shows the country’s steel output fell 1.7 per cent in May from 12 months earlier.
Steel production reached 69.95 million tonnes in May, which brings output in January-May to 340.17 million tonnes.
This is 1.6 per cent lower than the same period last year.
The price of iron ore has had a tumultuous year which saw the price drop to an all-time low of $US46 per tonne in April.
At $US64 per tonne, the price is around 30 per cent lower than it was at the same time last year.
Most industry analysts expect China’s slowing steel production sector to put more pressure on the commodity during the medium term.
"Looking ahead, steel production will remain sluggish during the summer, and July steel price cuts will dampen the incentive for production," Argonaut Securities analyst Helen Lau said, according to Reuters.
"Iron ore prices will be under pressure over the short term."