BEIJING: Chinese iron ore futures dropped nearly 5% on Thursday, logging the biggest percentage loss in four weeks, as weak pre-holiday downstream steel consumption and a government call for less steel output this year weighed on the steelmaking raw material.

The China Iron and Steel Association said the country’s steel imports will continue to rise in 2021, and encourages purchases of primary steel products to mitigate the effect of less crude steel production this year that the government has urged.

The association also suggested the government to improve related policies to ease China’s reliance on imports of steelmaking ingredients like iron ore.

The most-traded iron ore futures contract on the Dalian Commodity Exchange, for May delivery, closed down 4.8% to 986 yuan ($152.14) a tonne. It fell as much as 5.5% earlier in the session.

Spot 62% iron ore for delivery to China was unchanged at $167.5 per tonne on Wednesday from the previous session, according to SteelHome consultancy.

Construction rebar on the Shanghai Futures Exchange dropped 1.7% to 4,275 yuan a tonne as downstream sectors came to a standstill ahead of the Chinese New Year holiday.

Hot rolled coil futures declined 1.5% to 4,423 yuan per tonne. Dalian coking coal slipped 1.1% to 1,566 yuan per tonne. Dalian coke dropped 1.5% to 2,605 yuan.

Stainless steel futures were down 1.6% to 14,215 yuan per tonne at close.