The market for iron ore Figure 1 Price of iron ore (September 2013 - August 2014) US dollars per tonne 140 135 130 125 120 115 110 105 100 95 90 85 80 0 Sep-2013 Jan-2014 Oct -2013 Dec-2013 Nov-2013 Jul-2014 Feb-2014 Apr-2014 Mar-2014 Jun-2014 May-2014 Aug-2014Extract 1 Falling iron ore prices The price of iron ore has fallen dramatically since September 2013 following a signicant increase in production from the world's four largest miners of the commodity, Rio Tinto, BHP Billiton, Vale and Fortescue. This has come at a time of falling consumption of iron ore from China, the world's biggest customer. Iron ore is a key raw material in the production of steel. The slump in iron ore prices is forcing high-cost iron ore producers to close down operations. Stockpiles of iron ore at Chinese steel mills are at record levels. Despite the fall in price, BHP Billiton has announced plans to increase annual production capacity of iron ore by 30% to 290 million tonnes by 201 7. This follows Rio Tinto's plans to increase annual production capacity by 24% to 360 million tonnes by 2015. Both companies have managed to increase efciency and cut production costs, but this has not prevented their share prices from falling. They are condent that long term demand for iron ore will grow from India, China and other Asian countries. (a) With reference to Figure 1 and the first paragraph of Extract 1, explain the causes of the decrease in the price of iron ore over the period shown