China cut the growth target for this year to 6.0 percent to 6.5 percent, as expected, from around 6.5 percent last year and offered more stimulus, including cuts in taxes and social security fees, increases in infrastructure investment and lending to small firms.
Whether the stimulus measures are enough to meet the revised growth target, which is a "wide" range, remains to be seen, said analyst Helen Lau at Argonaut Securities.
"The market is reacting to the headlines," she said. "Iron ore prices had recently surged due to concerns over supply, but there is still uncertainty on the demand side."
The most traded iron ore on the Dalian Commodity Exchange fell as much as 3 percent to 612 yuan ($91.36) a tonne. Dalian iron ore hit a record-high 657.5 in February in the aftermath of top miner Vale SA declaring force majeure on iron ore contracts after one of its tailings dam in Brazil collapsed in late January.
Iron ore prices are likely to "moderate" in March, said analyst Edward Meir of INTL FCStone.
"We do not see the supply disruptions lasting long as the Brazilian government has given no indications that it intends to come down hard on Vale," he said.
He downplayed the impact of the Brazilian supply cutbacks, which he said are still "relatively small in the grand scheme of things, impacting roughtly 1 1/2 of world supply".
Other steel-making raw materials were also lower, with Dalian coke down as much as 3.2 percent at 2,071 yuan a tonne. Coking coal slid as much as 2.3 percent to 1,266.5 yuan.
The most-active construction steel rebar contract on the Shanghai Futures Exchange dropped as much as 1.5 percent to 3,762 yuan a tonne.
Hot rolled coil lost 1.4 percent to hit 3,752 yuan.