Iron ore fell from the strongest level since June 2022 as investment banks and securities brokerages expect the slump in China’s housing construction to persist into next year. 

Ten major institutions including Goldman Sachs Group, Morgan Stanley and UBS Group see China on track to post three straight years of contractions in property construction, a record streak. Real estate accounts for close to 40 per cent of the country’s steel needs.

Major economic hubs, including Beijing and Tianjin, are also starting to warn about air pollution, and controls could be more restrictive and last longer than those in early December, according to a report by Kallanish Commodities.

That comes after the purchasing managers’ index for the downstream steel industry in China contracted in December from a month earlier, as colder temperatures slowed construction work, according to Shanghai Metals Market. 

Iron ore lost 1.6 per cent to US$139.05 a ton by 12.03 pm in Singapore, after rising for two straight days. Futures in Dalian and steel contracts in Shanghai also fell. BLOOMBERG