MANILA: Dalian and Singapore iron ore futures fell to one-week lows on Tuesday on pessimism over demand prospects in top steel producer China, although support appeared intact near $100 a tonne.

Benchmark prices of the steelmaking ingredient have fallen more than 20% from this year’s peak at just above $130 a tonne around mid-March, when sentiment was positive as China entered its peak spring construction season and following its exit from strict COVID-19 restrictions.

With the construction season now winding down and steel demand not meeting expectations, while the domestic economy performs unevenly amid a sluggish property sector, analysts said China’s iron ore consumption may remain muted.

Iron ore’s benchmark June contract on the Singapore Exchange was down 1.8% at $100.30 a tonne, as of 0339 GMT. It dropped to $99.80 earlier in the session, its lowest since May 15.

The most-traded September iron ore on China’s Dalian Commodity Exchange ended morning trading 2.3% lower at 712 yuan ($103.01) a tonne, after earlier falling to 709.50 yuan, its weakest also since May 15.

Iron ore has pulled back after last week’s rally spurred by hopes that China will roll out additional policy support for its economy. “However, considering the lack of significant changes in monetary and fiscal policies, it is anticipated that China’s economic cycle will reach its trough in Q3,” industry consultancy and data provider Mysteel said in its weekly outlook.

“The bearish expectation stems from the residential sector and private corporate sector, which are less optimistic about future prospects.” Mysteel said the decline in real estate investment and new construction activity in China in the January-April period signalled continued weakness in steel demand.