The seaborne iron ore price has experienced its largest one month drop in almost eight years as shipments increased to China, sparking supply pressure.
S&P Global Platts reported that iron ore lump premiums have plummeted 74 per cent over the past two months as steel mills reduced the usage of lump in response to thin steel margins.
Chinese steel-markers are instead turning to domestic ores and imported fines in the blending process. This coincides with global trade tension as US President Donald Trump threatened to introduce a tariff on Chinese goods.
The price of the commodity has dropped from $US110.65 ($163.62) at the end of July to $US84.64 by the end of August, according to Market Index, as Australian mining companies ramped up lump shipments to China throughout July.