There are indeed many commodity players who are betting on the fall of Iron ore prices along with other major industrial commodities. The expected weakness in US and Europe coupled with the likely slowdown in China are the key reasons behind the weak sentiment.
While we feel that crude oil may suffer badly in the coming months if there is a recession in US and Europe, but Iron ore may not suffer at all under these circumstances. The key reasons are two pronged :
One, over 90% of the iron ore supplies are controlled by just three international giants, who have been consciously cutting down on new supplies to maintain the pricing power. That is remaining and they are working only on strengthening further.
Two, the Chinese demand is said to remain very high and coupled with that the Asian economies are set to perform better. That could only mean that Iron ore demand will remain high and that would help the producers to jack up the prices in the coming months.
Also the Japanese economy is all set to get back into decent recovery in the coming months, and that would be more than enough to make up for the loss of demand in US and Europe.
So we are strongly of the opinion that the Iron ore prices would keep going up in the coming months.