China's fourth-largest steelmaker, Ansteel has indicated that it expects the price of iron ore to fall during the second half of 2013 due to lower demand for steel in the world's second largest economy.

Ansteel chairman Zhang Xiaogang said that he expects the average iron ore price for the year to be between $110 and $120 per tonne, indicating that the fall in price is expected to continue in the coming months. Mr Zhang also said that the steel industry in China requires five and seven years to return to profitability after the industry firms recorded losses during the year.

"We have to prepare for a long-term struggle. Some people will collapse during this war of attrition, if their cash flow dries up, or if they can't make any money at all," he said.

The projections are mostly in line with that of the iron ore exporters and government agencies in Australia, which is a leading supplier of Iron ore to China. The Fortescue Metals Group from the country had expected the average iron ore price to be about $US120 in the year. The company revised its estimates and now believes that the average price would be in the range of $US120 to $US130 a tonne.