Iron ore declines in anticipation of reduced demand

Futures in Singapore fell 3.6% today, the biggest drop in more than three weeks, after rising for six weeks in a row.

Prices had soared on the Chinese authorities' efforts to support the real estate sector, expectations of fiscal stimulus and steel production expected to recover this month.

China International Capital analysts Zhilu Wang and Chaohui Guo said they expect a decline in iron ore supply and demand in 2022. Experts expect steel consumption to fall 1.2 percent compared to the previous year due to weakening in the construction industry and government carbon targets. Analysts said, "If the real estate sector recovers stronger than forecasts or if production problems decrease, prices may remain above $100."

In China, the government-backed China Metallurgical Industry Planning is also of the opinion that steel consumption will decrease by 4.7 percent in 2022.