More falls tipped for iron ore

The price of iron ore is likely to continue to fall in coming sessions after slumping 3.4pc to $US70.90, say analysts.

Iron ore being loaded at a port in east China's Shandong province. Pic: Getty Images

The price of iron ore is likely to continue to fall in coming sessions, continuing recent declines, say analysts.

The price of Australia’s biggest export slipped to a one-month low on Friday, down 3.4 per cent to $US70.90 a tonne, according to The Steel Index.

It comes as recent Chinese data, including retail sales, industrial production and fixed asset investment data, have showed signs of slowing.

“I’d say that given where we are and the trends we’re seeing and the failure to hold key level are probably the further downside risks here,” IG chief market strategist Chris Weston said.

He noted that iron ore futures had a greater reaction in the futures price which dropped 18 per cent to “just below the 50 per cent retracement level of the rally that we saw through June and into August”.

“Spot prices have fallen a little bit but probably not at the same magnitude,” he said.

Analysts have predicted the demand for iron ore may slow as a result of steel plant closures, making investors cautious.

“Some of the August high frequency data points have been a bit lacklustre, certainly suggesting that we could see a modest tweaking of growth expectations,” Mr Weston said.

“I think a large amount was just everything that we saw throughout late May into early June which really propelled the price back.”