Since that fateful day earlier this month when Cliffs Natural Resources Inc. (NYSE: CLF) announced the sale of 3.5 million new shares of the company’s stock, the share price has dropped from its 52-week high of more than $8 a share to just under $6 a share. The share offering was just the beginning though.

Since then the only analyst rating change we’ve noted is a reiterated Sell rating from Morgan Stanley. The analysts have a $2 price target on the stock, well below the $6.50 consensus 12-month price target.

But the bigger problem for Cliffs is sliding prices for iron ore, both fines and pellets. The spot price for iron ore has dropped from a high of $61 per metric ton in April to $57 in July, and prices continue to soften. Bloomberg expects an average price of $51 per metric ton in the fourth quarter and an average of just $45 per metric ton in 2017. The year-to-date average as of Monday was $53.64.

To a large degree, prices for iron ore depend on demand for steel, and steel rebar prices have risen by nearly 50% in China so far this year. But even surging demand in China is not expected to last.

But the base metal is not dead yet. According to a report Wednesday morning from Hellenic Shipping News, spot prices were better. Also:

Strengthening steel market also boost traders’ confidence in the coming market in the short term. A steel mills said transaction prices rose on expectation, but partial traders took chance to increase sales. Steel mills have certain inventories and large-scale replenishment was hard to happen.

The Hellenic website shows iron ore swaps at $61.04 in Singapore on Wednesday and iron ore futures at around $68.48 on China’s Dalian exchange. Iron ore concentrate (66% iron) traded up about $1.50 at about $88.50 Wednesday morning.

While the international markets may be showing some grit right now, Cliffs exports nearly none of its U.S. production and its Australian operations account for about 27% of revenues and 16% of margins. Australian production supplies the seaborne iron-ore market for Asian steelmakers.

Cliffs struck a long-term deal with ArcelorMittal (NYSE: MT) in May to provide the steelmaker’s U.S. plants with iron ore pellets for a term of 10 years. That announcement sent Cliffs stock soaring 40%. Shares had more or less steadily continued to post gains until earlier this month.

The stock traded down more than 6% in the noon hour Wednesday, at $5.88 in a 52-week range of $1.20 to $8.45. The consensus 12-month price target is $6.50.

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