The Northern China import price of iron ore slumped on Tuesday after top supplier Australia raised concerns about the strength of demand from the country which consumes more than two-thirds of the seaborne trade.

According to data supplied by The Steel Index, 62% Fe content fines (CFR) delivered to the port of Tianjin declined 3.5% to $68.30 per dry metric tonne, trading below $70 for the first time since July. Prices are down 12% over the last two weeks. Lower grade ores tracked by MetalBulletin also fell with 58% Fe fines shipped to Qinqdao losing 4.3% in value at $42.61, a record discount to the MB benchmark.

The Reserve Bank of Australia waded into the debate about the direction of the iron ore price on Tuesday with the release of the minutes of the central bank's September meeting:

[…]China, with the world’s largest population, had reached a similar level of steel production per capita to that of industrialised economies. Iron ore prices had been supported at higher levels because of sustained strong demand for steel in China. However, prices were expected to fall in the period ahead because of the ongoing expansion of global iron ore supply following an extended period of strong investment.

Members also noted that Chinese steel production per capita was likely to be close to its peak and that growth in Chinese steel production would not add much to global demand for iron ore in the future. Members observed that, in the longer run, there was potential for India to have a noticeable effect on commodity markets as investment in residential construction and transport infrastructure increased.

China produces as much steel as the rest of the world combined. Data released by China's steel industry association yesterday showed mills produced record tonnage for a second month straight in August.

But the rapid growth is mainly in anticipation to mandated output cuts – as much as 50% in top steel producer Hebei province – during winter months in an effort to alleviate pollution problems in large cities. That could lead to a steep drop-off in iron ore demand, particularly given that stockpiles at the country's ports remain near record highs above 130 million tonnes.

The Chinese capital is attracting particular attention from authorities as it is playing host to the 19th national communist party congress mid-October.  The gathering which happens every five years reshuffles the core leadership of the country and provides a chance for President Xi Jinping to firm his grip on the party and Chinese government.

Beijing will suspend construction of major public projects during winter to improve air quality, the official Xinhua News agency reported on Sunday. Construction of road and water projects, as well as demolition of housing, will be banned from Nov. 15 to March 15 within the city's six major districts and surrounding suburbs.

• [Editor:Wang Linyan]