The price of iron ore fell nearly 7% on Tuesday on concerns about higher interest rates and still stagnant demand from China.
The most active Dalian Commodity Exchange iron ore futures for September delivery fell 7% to 796 yuan ($118.45) a tonne.
The US Federal Reserve approved a half-point rate hike last week and said it could stick with it for the next two to three meetings and then evaluate the economy and inflation response before deciding whether further increases are needed.
"This resulted in a significant decline in prices for US dollar-denominated commodities such as iron ore," GF Futures analysts wrote in a note.
Meanwhile, low profit margins for steelmakers and overall steel production controls in China are holding back production growth and reducing demand for steelmaking ingredients, according to GF Futures.
The most active China Dalian Commodity Exchange iron ore futures for September delivery fell to their lowest level since March 16.
Trading ended down 4.1% to 779 yuan per tonne, extending the losses to the third day.
The benchmark 62% ore imported to North China fell 6.18% to $129.92/t, the lowest since January 18.
China's central bank said on Monday it will step up support for a slowing economy by keeping a close eye on domestic inflation and monitoring policy adjustments in developed countries.
