The global iron ore price is being heavily weighed down by high inventory stock levels at Chinese ports.

It is reported that stocks of iron ore at Chinese ports have now risen to their highest levels in more than a year, surpassing 100 million tonnes.

This huge oversupply is outstripping demand from Chinese steel mills, with overall levels of steel consumption in China forecast to continue falling.

The drop-off in demand comes at the same time that supply is increasing at the ports, leading to growing expectations of production cuts at Chinese steel mills.

This combination of simultaneous oversupply and waning demand in the Chinese market, together with volatile global trading in commodities futures, is an ongoing weight on the slumping iron ore price.

This is the key factor to consider when speculating on where the global iron ore prices may go. While we may see some small price rallies from time to time, as has been the case this year, the fundamentals of the sector remain the same, with serious oversupply set to keep prices down.

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