The world's biggest mining investor has given a clear signal on where it believes the iron ore price is headed, selling off a healthy portion of its iron ore exposure in recent days.
Funds manager BlackRock sold down close to $60 million worth of shares in iron ore stocks last Thursday, in a series of transactions that coincided with iron ore suffering its biggest price fall since June. Australian pure-play iron ore miners Fortescue Metals and Atlas Iron were the main targets, while smaller parcels of shares in Rio Tinto and Brazilian miner Vale were also sold down.
BlackRock sold 10.8 million Fortescue shares - more than 10 per cent of its stake in the miner - for close to $40 million.
That sale came before Fortescue revealed a joint venture with a Taiwanese steel maker that was roundly applauded as a good result for the miner. BlackRock also sold down close to 6 per cent of its stake in Atlas, and smaller stakes worth millions of dollars in both Rio and Vale.
While BlackRock retains significant shareholdings in all four companies, the sell-down adds fuel to the debate over whether the iron ore price will repeat last year's spring slump, when it plummeted to $US86 a tonne in September.
A surge to $US142.80 in recent weeks has prompted some miners and investment bankers to speculate that there won't be a slump this spring, particularly given iron ore inventories in China remain low.
The view is not shared by UBS commodities analyst Tom Price, who believes Chinese steel makers will soon start curtailing production, which will translate into weaker demand for iron ore.
Mr Price has predicted the price will fall as low as $US70 a tonne for a few panicked days between now and the end of October.
BlackRock's stake in BHP Billiton - a company that also counts iron ore as its biggest money spinner - remained unchanged, which may be a nod to BHP's more diversified portfolio.
BHP will report its full-year result for the year to June 30 on Tuesday and is tipped to post an underlying profit of about $US12.6 billion. Investors will look for guidance on whether BHP intends to go ahead with spending on the Jansen Potash project in Canada.