The iron ore price paid by China has fallen by almost a quarter from its September peak to $138 a tonne. But mining houses show little sign of slowing their capital expenditure. Anglo Americandevoted a fifth of its $2.3bn capex in the first half to iron ore development projects in Brazil and South Africa. Its project pipeline for the steelmaking ore has expanded fivefold since 2007. BHP Billiton, with capex in its year to June at more than 40 per cent of its $30bn net operating cash flow, has set aside $8.4bn for iron ore projects this year. Rio Tintoand Valealso invest hard in capacity.

This giddy spending might look out of tune with the global economic mood music. China’s economy expanded at its slowest clip in more than two years in the third quarter, albeit a still punchy 9.1 per cent. But the Organisation for Economic Co-operation and Development has inked in growth of 8.5 per cent for next year. That is 8.5 times the pace of some developed economies. Chinese equities, meanwhile, have fallen for four straight weeks, amid concerns of a slowdown. And China’s purchasing managers’ index slipped to 49 last month, signalling contraction. Growth was bound to slow as the country’s economic base expanded.

Investors should keep things in perspective, however. China is still in the early stages of urbanisation. It will approach the 50 per cent urbanised level only in 2014, HSBC estimates, (the US got there in about 1920), and could still be up to a decade away from when demand for iron ore peaks.