The S&P/ASX 200 Index (ASX: XJO) ended its winning streak on Wednesday by dropping 0.85% to 6,714.1 points.

While a good number of shares dropped lower with the index, the worst performer by some distance was the Fortescue Metals Group Limited (ASX: FMG) share price.

The iron ore producer’s shares ended the day a disappointing 8% lower at $20.33.

Why did the Fortescue share price sink 8% on Wednesday?

Investors were selling Fortescue’s shares on Wednesday following a sharp decline in the iron ore price overnight.

According to CommSec, the spot iron ore price lost US$10.55 a tonne or 6.1% of its value to close the session at US$163.60 a tonne.

This didn’t just weigh on the Fortescue share price, it also hit the shares of BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) hard as well. The BHP share price fell 3% and the Rio Tinto share price tumbled 5% today.

And spare a thought for the Australian share market’s latest IPO – Genmin Limited (ASX: GEN).

The West African-focused iron ore explorer and developer’s shares hit the ASX boards this afternoon after raising $30 million at a listing price of 34 cents per share. This gave it a market capitalisation of approximately $136 million.

The unfortunate timing led to the Genmin share price losing 13% of its value on its first day of trade.

Why did the iron ore price tumble?

Traders were selling the steel-making ingredient on Tuesday night after developments in China.

According to CommSec, authorities in the steel-making hub of Tangshan, China have imposed steel production restrictions to counter heavy air pollution.

This has sparked fears that demand could soften and the elevated prices that iron ore is commanding could come under pressure.

Given how most analysts are forecasting these strong prices to stick around for longer, investors appear nervous that earnings estimates for the miners could be downgraded if prices continue to slide.