iron ore becoming a speculative commodity

Iron ore players are getting sold off. I do not have the latest iron ore price handy but I am assuming it would have dipped following yesterday's economic news from China. If iron ore has dipped, it shows that it is becoming more of a speculative commodity, like gold. That means more traders are buying and selling iron ore or its derivatives solely to profit from the movement in price. This is like gold, people trade gold with no interest in keeping the yellow stuff for its intrinsic value.

If price of iron ore was purely a function of demand and supply, demand from steel mills and supply from iron ore miners, then the price of iron ore should not react to economic news, or only to the extent that steel mills actually adjust their production and IO consumption patterns due to revisions in economic forecasts.

Any commodity that becomes speculative means increased volatility and reduced correlation to underlying demand related to its actual use. That is bad news for investors hoping for a stable IO price.