According to Reuters, iron ore prices traded later on the Da lien exchange fell 10 percent in the week ending July 23, and it was the worst week since February last year.
Iron ore prices ended last week at 1,126 yuan (or nearly $US174) a tonne, 17 per cent below the peak set in May.
Spot iron ore prices fell 8.8 per cent to more than $US201 a tonne.
The main reason for the fall in iron ore prices came from China's move as it squeezed steel output.
It is clear that Beijing wants to cut steel production in 2021 below the record threshold set in 2020 by tough measures.
Several steel producers in China's Jiangsu, Fujian and Yunnan provinces have been asked by the government to cut output. Some reports show that many steel mills in the leading manufacturing city of Tangshan have limited output due to warnings of official penalties for over-production.
Although it is only early days, there have been some signs that steel production has gradually declined in China, the world's leading steel producer.
Crude steel production from a record May 99.4 million tonnes fell 5.6 percent to 93.8 million tonnes in June.
Despite this, the output of finished steel still increased by nearly 12% to more than 563 million tons in the first half of this year.
Another factor causing iron ore prices to fall is the abundant supply in China as imports in July are expected to reach 107.4-112.5 million tonnes, the highest level since October last year.