Iron ore - from strong to weak

Much of the sharp fall in iron ore prices can be explained by the general recessionary trends, the ongoing credit crunch, cutbacks in steel production by large producers and the steep reduction in imports by China.

January to July this year saw the prices of most metals touch new highs, with iron ore being no exception. Among the most widely used raw materials in the world, iron ore saw an unprecedented surge in demand in the run-up to the Chinese Olympics.

The rally in iron ore was mainly led by expectations of increasing demand for high end steel products from emerging markets, especially BRIC countries, as they ramped up construction and infrastructure spends.

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