Investors weighed in on expectations of a surplus of steel raw materials next year, which led to a drop in iron ore production.
After six weeks of advances, ore futures in Singapore plummeted 5.4 percent on Monday, the most in a month.
China has highest number of virus cases since January
The iron ore market has been buoyed by Chinese government efforts to promote the real estate industry, as well as anticipation of greater fiscal stimulus and steel production recovery this month.
“We predict that by 2022, the entire supply and demand for iron ore will have decreased even more. Steel consumption is down 1.2 percent in the new year compared to the previous year, owing to a weakening construction sector and government carbon objectives, as well as a 25 million tonne increase in major mining supply, according to experts at China International Capital Corp. Chaohui Guo and Zhilu Wang
Iron ore prices could linger above $ 100, according to CICC analysts, if real estate investment climbs faster than predicted or steel output limitations prove to be weaker than expected.
Since the weekend in January, China has reported the highest number of cases of the virus.