The Chinese imported iron ore market exhibited weakening trends last week with lower grades leading the downslide.

Transactions continued to be scarce in the physical iron ore market as traders stood on the sidelines. A few traders said some steel mills have stopped purchasing to prepare for more softening in iron ore prices.

Announcement for credit squeeze resulting in down trend in Chinese domestic prices is attributed to weakening of spot prices of Indian iron ore fines last week

But market players see this as a temporary phase and expect recovery to take place soon as Chinese steel production remains unabated pushing for higher volumes of iron ore. Moreover Chinese buyers are expected to secure tonnages before their incoming holidays