Iron ore continues to retreat in China

Iron ore decreased below $100 per ton as China increased restrictions on industrial activities in some provinces.

Futures in Singapore fell as much as 11.5% on Monday before cutting some losses on weak trade due to the holiday in China. Prices have dropped nearly 60% since the record in May and fell below three figures for the first time in more than a year as Chinese demand dwindled.

The world's largest steelmaker is intensifying its production restrictions to reach its target of lower volumes this year, as it works towards its goal of achieving carbon neutrality by 2060. More recently, restrictions have focused on improving air quality for next year's Winter Olympics.

“In the weekly Chinese steel production figures, we expect the declines in iron ore prices to continue,” said Atilla Widnell, managing director of Navigate Commodities. He said shipments from Australia are also higher each week, and Brazil's exports are strong. He reported that the research firm's short-term price target is between $94.41 and $98.28 per ton.

China's moves to rein in its massive steel industry have wreaked havoc on iron ore markets this year, and iron ore rose in the first half as mills switched to front-loading volumes before additional production restrictions were imposed. Prices have also been shaken by concerns that a real estate decline and turmoil at developer China Evergrande Group could weigh more on a crucial source of demand for steel and metals.

Iron ore futures fell 8.3 percent to $93.25 per ton as of 12:53 London time. Prices fell for the ninth day, their longest period losses since 2015. Miners' shares also fell, with BHP Group 4.4%, Rio Tinto Group 5.5% and Fortescue Metals Group Ltd. It lost 3.7% of its value.