Iron ore is recognized as the most volatile commodity asset in the modern global market. The dynamic of its market quotes for the last month looks like a roller coaster. Besides, iron ore stands out from other commodities as the raw material with the most uncertain outlook.

Currently, the commodity market is clearly bullish for obvious reasons. Improvement of business activity and industrial production around the world boosts demand that encourages a rally of commodity prices. Iron ore prices clicked into gear as soon as the global economy exposed the green shoots of recovery. Nevertheless, the commodity asset sharply reversed its direction a few times. The price conquered a new all-time peak in just a month, then abruptly plummeted, and again took off. With such wild gyrations, iron ore has gained the reputation of the most volatile commodity in the market. What lies behind the commodity turbulence? This mainly comes as a result of uncertain policy of China’s authorities. Traders are trying to figure out whether iron ore will be in high demand among Chinese steel mills, which are the major consumers of the raw material, and how Beijing’s policy could influence this demand. “China wants to cut steel production but control prices, and to reduce investment but maintain employment,” Tomas Gutierrez, an analyst at Kallanish Commodities Ltd., comments on Beijing’s stance on the domestic manufacturing sector.