Dalian iron ore edged lower in range-bound trade on Friday, hitting its lowest in more than a year on worries that weak demand for the steelmaking ingredient in China, the world's biggest steel producer, will persist beyond 2021.

The most-traded iron ore for January delivery on China's Dalian Commodity Exchange ended morning trade 0.3% lower at 521.50 yuan ($81.67) a tonne after touching 509.50 yuan earlier in the day, its lowest since Nov. 6, 2020.

On the Singapore Exchange, iron ore's front-month December contract rose as much as 3.4% to $89.20 a tonne after a two-day fall.

Benchmark 62%-grade iron ore's spot price in China was $90 a tonne on Thursday for a fifth time this month. The price is the weakest in 18 months and off 61% from a record peak scaled in mid-May.

"China's power shortages and emission curbs ahead of the Winter Olympics will be major demand headwinds, which could limit any price rise," ANZ commodity strategists said in a note.

"Longer term, environmental targets on the steel industry suggest further losses in demand for iron ore."

Steel mills' operations in China are expected to remain restricted before and during the Beijing Olympics in February to clear smog-laden skies.

China's resolve to limit its steel output in line with its decarbonisation goals has resulted in a steady decline in monthly production between July and October, triggering a collapse in iron ore demand.

China has also been restricting electricity consumption by highly energy-intensive sectors, including the steel industry, to ensure steady supply ahead of winter.

Construction steel rebar on the Shanghai Futures Exchange slipped 0.1%, hovering near an 11-month low, while hot-rolled coil shed 1.3%, down for a fifth straight session. Stainless steel gained 0.6%.

Dalian coking coal dropped 0.8% and coke lost 1.3%.