Drop in finished steel levels by 1% during the last week of July bore on the iron ore levels as well pushing the prices down by 3%. Even though offers and bids were present transactions eluded amidst lack of interest to conclude deals. The weak steel market was seen as the biggest contributor to the bearish mood.

Since much of the stock build up has been done during the past 6 weeks the mills were slow to conclude deals immediately.

Bleak growth outlook in H2 unless some credit growth triggering decisions are taken by the government to infuse credit in short run kept the futures depressed.

However given the size and potential of growth in China pertaining to housing and urbanization in turn triggering infrastructure development can the turn the tables around at the slightest prick of credit easing. Government cannot be oblivious to the perils of slow economy and would set a floor for stability before it comes up with mid-term credit easing.