China's spot prices of iron ore have been dropping since May, according to China Iron and Steel Association.

    Producer price of 66-percent moisture fine iron ore powder (tax included) in Tangshan of North China's Hebei Province, for example, were 1,000~1,030 yuan/ton in August, down 16.67 percent from 1,200~1,210 yuan/ton in May.

    Prices of iron ore concentrates in Handan of Hebei province were 1,450~1,500 yuan/ton in September, down 17.14 percent from 1,750~1,850yuan/ton in MayRen Linna from Essence Securities attributed the price drop to thefalling demand under influences home and abroad. Firstly, steelexport slowed down amid global economic recession due to U.S.

    subprime crisis, resulting in the fall of steel  demand, which inturn led to a falling demand for iron ores; secondly, around 70-million-ton iron ores stockpiles at Chinese ports put a big pressureon the market; and thirdly, the steel demand weakened with the statemacro control taking effect.

    Ren held that the iron ore prices would stay low for a while, asfurther state macro control would slow such steel-consumingindustries as real estate and motor vehicle, forcing steelenterprises limit or even stop production.

    According to Zhao Baofeng, an analyst from Everbright Securities,the steel demand in China will bounce back in the long run, with thedevelopment of industrialization and urbanization. However, thegrowth rate might not be as big as before. Thus the prices of ironores would go moderate amid fluctuations.