Steel major warns of 'war of attrition' A long road ahead for iron ore miners. One of China's top-five steel makers has warned Australian miners of weaker iron ore prices in the second half of 2013, as much of China's steel industry struggles to break even. Ansteel chairman Zhang Xiaogang told London's Financial Times the average iron ore price for 2013 would be between $US110 and $US120 a tonne. While the prediction is similar to the $US111 a tonne it was fetching on Monday, the price has averaged much higher, at $US140 a tonne, when measured since January 1. Mr Zhang's comments imply price falls are ahead for the commodity, which is Australia's most lucrative export. "We have to prepare for a long-term struggle," Mr Zhang said, in reference to the profitability of the Chinese steel sector. 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. While Mr Zhang might sound bearish, his prediction puts him in line with forecasts made by iron ore exporters and government agencies in Australia. At the start of 2013, Fortescue Metals Group - widely considered the most bullish player on the iron ore scene - predicted iron ore would average about $US120 a tonne during 2013. Fortescue chief Nev Power upgraded his expectations slightly in April, saying iron ore was "probably going to trade in the range of $US120 to $US130 a tonne for the foreseeable future. But the rival predictions remain within 10 per cent of each other. The Bureau of Resources and Energy Economics was also in the same range as Ansteel and Fortescue, with its prediction in March that iron ore prices would average $US119 a tonne in 2013. The iron ore market has shown seasonal trends in recent years, with the price typically reaching its annual nadir around August and September, before rising to its annual peak in the March quarter. But most experts agree that the peak is in the past because Chinese demand for iron ore is growing at a slower rate, while the supply of iron ore is growing significantly because of Australian miners' expansion programs.