The price of iron ore reversed recent gains on Monday amid new signs of an economic slowdown in China, which consumes more than 70% of the seaborne trade in the steelmaking raw material.

On Monday the benchmark 62% Fe import price including freight and insurance at the Chinese port of Tianjin slid 1.7% to $57.50 a tonne, retreating from a 10-week high hit last week according to data provided by The SteelIndex.

Iron ore is still trading up some 28% from record lows for the spot market hit July 8, but a near one-fifth year to date slump coming after 2014's 47% drop in the price continues to make life difficult for all but the most cost-effective producers.

Fines drive the iron ore price and it makes up the bulk of supply, but producers of so-called "lump" ore enjoy a little more breathing room.

Lump ore can be loaded directly into blast furnaces and is also easier to handle during transportation and can continue to be shipped during wet seasons (liquefaction can be an issue with the shipment of iron ore fines during wet weather).

China's steelmakers have been gradually substituting domestic supply with lump from Australian, South African and South American producers that lower costs and cut pollution by reducing the need for sintering and as and low-grade domestic producers shut down.

The seaborne iron ore lump market is estimated to grow to around 250 million – 300 million tonnes per annum in 2015. Lump typically comprises around 15-20% of the iron ore that is fed into blast furnaces.

The increasing importance of lump is clear from the launch of the world's first lump derivatives on the Singapore Exchange at the end of August.

SGX announced on Monday that during the first ten days, contracts equal to 340,000 tonnes of lump were traded on the market. Those volumes constitute a third more than the total in 2009 when Singapore first launched benchmark fines derivatives.

SGX says the correlation between lump premiums and the underlying fines price is on average very low – premiums have stayed fairly consistent over the last two years even as fines prices slumped by nearly $100 a tonne. From an average of 11.3% last year, lump premiums as a percentage of the underlying fines price have increased to 19% so far in 2015, touching a high of 32.2% at one point.

SGX believes lump imports will continue to displace domestic Chinese concentrate supply and "over the longer-term, depletion of high-grade hematite lump resources may also be supportive of lump premiums, particularly if environmental pressures remain prevalent."

While down significantly from December due to seasonal factors (cold temperatures in China's north reduce local concentrate supply), premiums have edged up to around $0.14 per dry tonne unit.

That translates into an effective price of some $66–$67 a tonne for lump ore on a 62% Fe basis.