By Greg Peel

The Dow closed down 68 points or 0.5% while the S&P lost 0.3% to 1405 and the Nasdaq dropped 0.1%.

It was a fairly offhand remark, made to reporters by BHP Billiton's ((BHP)) head of iron ore Ian Ashby, as he attended the Global Iron Ore & Steel conference in Perth yesterday. Ashby suggested that China's iron ore demand growth appeared to be flattening and would likely slip from double digit percentages to single digits soon, if it hadn't already.

The Australian stock market shrugged. The ASX 200 closed down 15 points but had begun the day feeling a bit weak and a 0.3% drop is hardly the stuff of major corrections. Asian markets also responded negatively, but it was up to Wall Street to react with a touch of panic. From the opening bell, the Dow fell 115 points, and all anyone could talk about was BHP (as well as Australia's new mining tax).

It's somewhat strange that despite Beijing's long stated and well known intentions to slow Chinese economic growth to a more manageable pace, every time there is a suggestion of a Chinese slowdown markets react as if it were shock news. It happened recently when Beijing declared its 2012 GDP growth target to be 7.5%, down from 8.0%, despite most world economists having adjusted their forecasts down to such levels months ago. It happens every time there is a slight turn down in China's manufacturing PMI, despite China's biggest export customer being a recession-bound Europe. And now it's happened on a suggestion that the frantic pace of Chinese iron ore demand growth is starting to ease.

Note that we are talking demand