It's been more than two years since the annual price setting system for iron ore as a commodity was ditched in favour of short term contracts and spot pricing.
The miners and the buyers have had to adjust to fluctuating prices for their product.
It has changed the way miners do business, particularly those like Fortescue Metals Group which operate on a higher cost basis than competitors such as BHP Billiton and Rio Tinto.
It's believed BHP and Rio can produce a tonne of ore for about $40 US.
FMG's cost base is roughly double that and analysts believe its profit margin was almost completely wiped out when iron ore prices dropped to $90 US a tonne in September.
When Chinese demand for iron ore started to greatly outstripped supply in 2007, spot market prices soared well above those negotiated in contracts.
After years in the doldrums, the mining industry finally had a renewed demand for its product.
But, in 2010, the benchmark system was abandoned.
A major factor driving the move was to better reflect daily, weekly or monthly demand for the product, but when demand is low, so are prices.
Resources consultant Dean Felton says the shift was mainly driven by China overtaking Japan as the world's largest iron ore importer.
"China prefers the spot market so they can adjust prices quickly, whereas when the Japanese were the price setters, they were quite happy to take stability over short term price gains," he said.
Keith Tan, from resource information provider Platts, agrees that Japan and China are fundamentally different buyers.
"There are two tracks of iron ore buyers; Chinese steel mills are on one hand while other mills such as those in Korea, Taiwan, Japan and Europe are on the other hand," he said.
"China likes to use the spot market because they can adjust iron ore prices to suit their demand for steel, in terms of need to build infrastructure.
"Whereas, the other buyers are using their ore to build ships, cars or household appliances and they want a more stable price before launching a new product or line of cars." Mr Tan says the move changed the face of the iron ore game.
"The iron ore market today is a vastly different world to what it was before 2010," he said.
"Immediately after the shift, most of the contracts were based on a quarterly average of the spot value, but today it's shifted to even shorter term, on a monthly or even a five to 10 day basis." Economic strength Resources analyst Philip Kirchlechner says the spot market has simply become another indicator of China's economic health.
"Everyone likes predictability in the markets, to see stable returns and cash flows, but with China pulling back on the reins a bit now, prices are starting to jump around more and there's more anxiety in the market," he said.
"At the moment it is ok but if the market continues to down trend, people might start to realise it isn't as good as the old system, where they had their prices protected for 12 months; that protection is now gone." The volatility was experienced recently when spot iron ore prices plummeted to $85 US a tonne, down from around $120.
It forced some miners to sack workers and scale back expansion plans.
FMG cut about 1,000 jobs and delayed its growth plans in the North West, while BHP Billiton shelved its outer harbour expansion at Port Hedland.
Mr Felton says while the spot market provides miners with short term gains, it's an issue in times of economic uncertainty.
"It would be different for every producer because they all have different debt levels and cash flow issues," he said.
"Someone like a Rio could probably hold out forever until the spot price improved," he said.
"[But] take a smaller producer such as an Atlas or an FMG and they may have to shift their tonnes despite the fall, in order to balance their books." Mr Tan says, however, the shift has eradicated a major problem over buyers and sellers failing to comply with their contracts.
He says when prices, agreed to in a contract, are much higher than spot prices or vice versa, both parties have a reason not to comply.
"This happened during the global financial crisis," he said.
"Some steel makers declined to take a delivery of ore because spot prices dropped well below contracted values, so using shorter term pricing is more reflective of current market conditions for both parties." Transparency For more than 40 years, iron ore miners negotiated a benchmark price for their product behind closed doors.
Mr Tan says those days are long gone.
"Before 2010, market information wasn't transparent; it is now very easy to tell who is buying or who is selling on any given day, along with the price, volume and when it is going to be delivered," he said.
Mr Felton says when negotiating short term contracts, most miners will try to include a clause allowing them to sell some of their stock onto the daily spot market if prices soar.
"The big miners will generally have a flex in their contract where they're allowed to shift about 10 per cent of their contracted stock into the spot market if prices suddenly jump," he said.
"So, if I was a producer and I had a contract price of $120 US and the spot price went to $150, I would take 10 per cent out of my contract and put it on the spot market, so it does allow for flexibility that didn't exist before." There's also talk the iron ore industry is starting to act more like a financial market, where people are betting on price fluctuations.
Mr Felton says he believes speculation is starting.
"Iron ore has never really been a speculative market but I think that's going to increase and you may see it go the way of oil where speculators de-link the price from the physical," he said.
"It's not an iron ore miner, it's a Goldman Sachs, for example, which believes iron ore shares are going to go up, so it buys today because they're cheap and then sells it when it can make a margin, without actually touching the ore." Mr Tan says while he's yet to notice any major shift towards this, it's a real possibility.
"You might see hedge funds or retail investors trading iron ore swaps which means people who are not involved in the iron ore business are starting to dabble in it." But, for now, he says the transition to shorter term pricing was an inevitable change.
"If you look at other commodities, like energy, oil and so on, they've evolved over time," he said.
"There was a tendency to reflect actual market conditions rather than something which is pre-determined by a small group of players in the industry."