Chinese mills have curbed steel production and slowed down purchases of raw steelmaking materials, in large part due to a persistent cash crunch and weakening sales. The most active May iron ore futures contract on the Dalian Commodity Exchange was 1.6 percent lower at 317.5 Yuan a tonne by the midday break.

This slowdown in Iron Ore Futures places a hasty end on the slight rebound experienced at the end of the year. According to Wang Yilin, an analyst with Sinosteel Futures in Beijing “The rapid rebound that has driven spot prices to above $40 a tonne has come to an end, and the supply glut for iron ore in the medium term has not changed.”