MANILA: Dalian iron ore fell on Friday to its weakest level in more than five weeks, while the steelmaking ingredient hit a contract low in Singapore, dragged down by mounting concerns about demand as top steel producer China battles fresh COVID-19 outbreaks.

Widespread COVID-19 lockdowns and a property sector downturn in China, along with growing prospects of a global recession as central banks hike interest rates aggressively to bring down inflation, have fuelled worries about demand for metals.

The most-traded iron ore, for January delivery, on China’s Dalian Commodity Exchange slumped as much as 5.1% to its lowest since July 26 at 652 yuan ($94.46) a tonne and was on track for its biggest weekly fall since mid-July.

On the Singapore Exchange, the benchmark October iron ore dropped 2.8% to $92.75 a tonne. This week, the southwestern Chinese metropolis of Chengdu announced a lockdown of its 21.2 million residents, while other major cities including Shenzhen in the south and Dalian in the northeast also stepped up COVID-19 restrictions.

In the spot market, benchmark 62%-grade iron ore bound for China traded at $98 a tonne on Thursday, the weakest since November, according to SteelHome consultancy. Notwithstanding recurring Covid-19 flare-ups and the property sector distress, China will avoid flood-like stimulus while moving to keep prices stable and maintain stable and moderate credit development, a spokesperson for the country’s central bank said.

Other steelmaking ingredients also fell, stretching their losses to a fifth day to hit the lowest since July, with Dalian coking coal slumping 4% and coke shedding 2.9%. Rebar on the Shanghai Futures Exchange dropped 3%, while hot-rolled coil fell 3.8%.

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