A global glut and collapsing Chinese demand have received most of the blame for the 60 percent slump in iron ore prices over the past year. But one group of traders has also played a key role in pushing prices lower – speculators and fund managers.

Money managers have almost doubled their short positions in iron ore futures and options on the New York Mercantile Exchange (Nymex) since the start of 2015, while other large speculators have increased their short bets by 150 percent, data from the Commodity Futures Trading Commission shows. The net effect has been a more than 170 percent jump in total Nymex iron ore futures open interest, just as prices fell more than a third to less than $50 per tonne.

“Everybody’s bearish and they’re playing on the bearish sentiment to go short, and a lot of companies who can’t trade physicals go into paper, so paper volumes have increased considerably and will continue to increase,” said an iron ore trader in Singapore. “Everyone’s trying to make money out of it. Nobody will go long in the current market.”

This aggressive short-sided bias to trader behaviour on Nymex seems to affirm the bearish sentiment prevailing in the Asian steel sector and cash iron ore market. It’s unlikely market sentiment will reverse anytime soon with big, low-cost suppliers Vale VALE5.SA, Rio Tinto RIO.AX and BHP Billiton BHP.AX bound to ship more cargoes to China, resisting calls to curb output.

Still, the large speculator short exposure also reveals the potential for a short-covering rally once market sentiment eventually improves.