"All that together indicates there's a real potential for a slowdown in iron ore until we get the steel industry back and going," he said.
One factor that could spur a recovery in global demand and thus benefit the Iron Range is China's new plan for stepping up spending on its public infrastructure, Fosnacht said. Another is the rebuilding effort after Superstorm Sandy, which he said eventually will mean a pickup in the construction industry in the Northeast and higher demand for new home appliances made of steel.
Craig Pagel, president of the Iron Mining Association of Minnesota, said there are good indications that the industry expects long-term demand for iron ore will be strong, such as the new Mesabi Nugget, Magnetation and Essar Steel projects on the Range, as well as U.S. Steel's plans to expand its Keetac operation.
"I'm cautiously optimistic that the economy will continue to recover and world trends for iron ore will continue to rise. ... I don't believe a short-term market indicator is a long-term trend," Pagel said.