Global iron ore prices will decline in the long-term due to China's economic slowdown and its struggling steel industry, insiders said on Tuesday.
The volume of China's online spot-trading platform for iron ore has been zero for the past four weeks as buyers and sellers sit on the sidelines.
"Traders expect a declining iron ore market, which is hitting volume," said Dong Chaobin, president of the China Beijing International Mining Exchange, one of the organizers of the platform.
"However, I think that the current iron ore prices are at a reasonable level," he said.
Since its launch on May 8, the trading platform has handled 42 transactions involving 5.29 million metric tons of the raw material, with a total value of $660 million.
On the platform, offers from sellers are three times more than the number of bids from buyers, which indicates a feeble market.
"Due to the global financial crisis and the domestic economic slowdown, China's iron ore consumption has been growing at a slower rate," Dong said. "However, iron ore production has been increasing rapidly driven by capacity expansion."
China's steel companies - the major consumers of iron ore - have been facing lackluster demand since late last year and are reducing production to survive.
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