This has reinforced fears that the 37% gain in commodity prices since September may be undermined in the coming weeks by a supply glut and a fragile recovery in the Chinese steel demand.
The miners are offering around 600,000 tonnes of iron ore in spot tenders closing Tuesday, at least 10% more than the usual volumes witnessed recently, traders said.
The December swap contract at the Singapore Exchange declined to $115.50 per tonne in early trade, after shedding more than a dollar to $115.72 on Monday, suggesting the prices may dip further. The benchmark ore, with a 62% iron content, dropped 1.2% to $122.25 a tonne, its lowest since November 6.
Iron ore prices started creeping up since September as Chinese steel mills began building inventories expecting the world's biggest metal player to announce some kind of stimulus in tune with the ones declared recently by the US Federal Reserve, the European Central Bank or Bank Of Japan to spur growth after a leadership transition in early November.
However, although Beijing has named its next leaders, it hasn't yet hinted at any significant policy steps. Miners are worried a rise in October housing inflation would discourage China from announcing any easing measures, and are trying to offload as much as they can before the ore prices start to crash again.
Home prices in China inched up 0.05% last month from September, according to a Reuters calculation, based on official data released this week, despite the government's efforts to temper rates.
Moreover, steel consumption has remained fundamentally weak in China and the appetite of many mills has already been satiated with the recent stocking up, the traders added. This means iron ore prices may remain subdued again unless China agressively pushes infrastructure.
The benchmark 62% iron ore price has jumped 41% since hitting a three-year low of $86.7 a tonne on September 5, but the slow pace of demand from Chinese mills has capped gains at just above $120.
After briefly hitting a fresh seven-week low of 3,539 yuan, Shanghai steel rebar futures settled up 0.2% at 3,552 yuan ($570) a tonne on Tuesday. The commodity dropped nearly 3% in the previous session.
China's average daily crude steel production inched up 1.6% to 1.95 million tonnes for the first 10 days of this month from the preceding period, as mills pushed up output on a recent rally in steel prices from September lows.
However, traders say, given the gloomy growth outlook across the US and Europe, iron ore may pare down some gains if China maintain status quo in policy-making.