MANILA: Dalian iron ore futures edged lower on Tuesday, while the steelmaking ingredient’s benchmark contract in Singapore briefly traded below $120 a tonne, with a guarded outlook for Chinese demand keeping trading volatile.

The most-traded May iron ore on China’s Dalian Commodity Exchange was down 0.4% at 849.50 yuan ($124.68) a tonne, as of 0300 GMT.

On the Singapore Exchange, iron ore’s most-active March contract slipped by up to 0.4% to $119.90 a tonne, before bouncing back above $120. Iron ore prices have rebounded from a November low below $90 a tonne, as China’s stepped-up policy support for its ailing property sector and dismantling of strict COVID-19 restrictions spurred expectations of demand recovery this year.

China, which produces more than half of the world’s steel output, buys about two-thirds of iron ore supplies.

Some analysts believe the expected iron ore demand recovery has already been priced into the market, while others were cautious in their outlook particularly for China’s real estate industry.

“Any growth in China’s steel demand from a boost in infrastructure construction is likely to be offset by another contraction in China’s property construction this year,” Commonwealth Bank of Australia commodities analyst Vivek Dhar said. New housing starts in China, which slumped last year, are likely to remain in contractionary territory, which could drag dampen iron ore demand, he said. “Weaker Chinese iron ore demand, combined with a modest uplift in seaborne iron ore supply, will weigh on iron ore prices through 2023,” Dhar said in a note, predicting prices to drift lower to $100 a tonne in coming months.

Other Dalian steelmaking inputs also slipped, with coking coal and coke down 0.5% and 0.8%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were subdued, with rebar down 0.2%, while hot-rolled coil was flat. Wire rod edged up 0.3%, but stainless steel slipped 0.4%.