The news sent Mount Gibson’s shares down 24.24 per cent, or 28c, to 87c.

Mount Gibson Iron announced that its customers in the economic powerhouse wanted to delay shipments.

In a note to the Australian Stock Exchange, managing director Luke Tonkin said customer and iron ore sector analysis indicated a slowdown in demand for iron ore in China as a result of economic uncertainty and tightening credit facilities. He said this had led to reductions in steel production and the significant build-up of iron ore stockpiles at Chinese ports.

The comments came as the Perth miner received requests from several customers to delay hematite ore shipments scheduled for the second quarter of the financial year.

“Mount Gibson has no obligation to agree to any of the relevant customers’ requests,” Mr Tonkin said.

“In this regard, each customer has entered into binding long-term ore sales agreements and is continually obligated to take delivery of the shipments allocated to it in the second quarter.”

Its customers include Chinese steel mill Rizhao Steel Holding Group, Citic Australia Commodity Trading and Marubeni.

It is understood 70 per cent of its customers asked for a shipment delay of one to three months, but it is not clear if most are steel mills or traders, who are said to be struggling to secure customers.

According to Mount Gibson, which recently had to deny market speculation that it was involved in takeover talks, it would attempt to reach an acceptable accommodation in respect to its long-term shipping schedules with contracted customers.

The spot price of iron ore is also playing a key role in market sentiment.

It is presently close to long-term contract prices and analysts expect it to fall below contract prices in weeks.

Industry insiders said iron ore giants BHP and Rio were yet to experience any pushback from China, because they had long-term contracts with the big players.

Fortescue Metals, which has denied market speculation it has two shiploads of iron ore sitting idle in a port in China, said it had not received any requests for cancellations or delays.

“Sure there is a slowdown — it would be silly to say there isn’t when we are in an enormous financial disaster,” operations executive director Graeme Rowley said.

He said the news from Mount Gibson showed the market would become selective.

“China is still keen to have a competitive iron ore supply industry,” he said.

UBS analyst Glyn Lawcock said the steel industry in China had slowed demand for iron ore and that other juniors could be affected, but it depended on whom their offtake agreements were with.

“It all depends on who is the customer at the end of the day,” he said.

Earlier this week, analysts warned that the iron ore sector was not immune to the global credit crisis.

Despite most predicting a 10 per cent increase in iron ore for the 2009 Asian contracts, there was also speculation there would then be a 20 per cent decrease in 2010 and a 10 per cent fall in 2011.

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