Iron ore futures slumped more than 4 percent on Monday, with the Dalian benchmark retreating from the 1,000 yuan a ton level scaled last week when prices were underpinned by strong speculative interest in the steelmaking ingredient.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange fell 4.2 percent to 956.50 yuan ($146.29) a ton in morning trade.
Iron ore’s most-active January contract on the Singapore Exchange dropped 4.5 percent to $150.71 a ton.
As iron ore had hit overbought levels, according to analysts, China’s steel producers on Friday pushed for a regulatory probe into the skyrocketing prices and a crackdown on any wrongdoing.
The speculative buying in futures markets had pushed the spot price in China to the highest since February 2013 at $159.50 a ton on Friday, SteelHome consultancy data showed.
Robust iron ore demand from steel mills stoked the latest price rally that was fuelled by growing risks of a supply crunch, as speculators bet on dimmingprospects for Brazil’s supply recovery and the impact from Australia’s cyclone season in early-2021.
