At $80 in September 2012, the iron ore price was at its lowest for the past 3 years. In 3 months, it surged to a current price around $150 a tonne, a 80% increase! But will it last? As it is often the case, China is the reason for the soaring price of the metal required to produce steel.

Iron ore prices hit a three-year low of $86.70 per ton earlier this month on fears of a slowdown in Chinese demand. So far iron ore is down 25% this year and its by product steel dropped 10 percent in 2012. Iron ore has struggled to sustain price gains since rebounding, with the outlook for Chinese steel demand staying blurry despite a recent increase in spot steel and futures prices.

China steel futures fell to an all-time low on Wednesday as poor demand in the world’s top steel market kept the pressure on prices, sending iron ore further below $90 a tonne to its weakest since October 2009.

As we were mentioning in Aluminum: China is running out of bauxite, in May, Indonesia asked all mining companies to either build their own processing capabilities locally or partner with companies able to do so, knowing that by 2014, exports of raw minerals, including bauxite, would be forbidden. Indonesia‘s goal is to derive more revenue from its mining sector.

In the last few days, Chinese customers started to either require deliveries to be postponed, or they simply refused shipments of iron or coal, mainly for the steel industry. For example, a large Chinese company postponed delivery of 6 million tons of iron.

Shanghai rebar fell to its lowest level in more than five months on Tuesday, stretching its losses into a third straight session, amid thin Chinese demand that could prompt producers in the world’s biggest steel market to curb output.

Three U.S. companies that are leaders in their fields–Nucor in steel, Cargill in agriculture, and ThyssenKrupp Waupaca in iron castings–are three of the leading U.S. purchasers of Brazilian pig iron. What are these American leaders doing to ensure that the supply chains of their Brazilian pig suppliers–particularly the camps of men who chop or chain-saw down eucalyptus trees and smolder them for eight days to make the charcoal feedstock for pig–are upholding Brazil’s environmental and labor laws?

Iron ore with 62-percent iron content fell 7.2 percent to $128.50 a tonne on Tuesday, according to Platts. It was the biggest percentage drop for the reference price index since Platts began publishing it in November 2008.

Prices of fines with 62 percent iron content delivered to the port of Tianjin plunged 18 percent in the past six weeks after reaching $191.90 on Feb. 16, the highest since at least 2008, The Steel Index data show. The cash price hasn’t traded at less than $140 per ton since September 2010. Swaps for December are at $126.87 per ton, according to Singapore Exchange Ltd.