BEIJING: Iron ore futures dropped on Tuesday as rising Covid cases in the world’s top steelmaker China fanned demand concerns, although low inventories lent some support.

The most-traded January iron ore on China’s Dalian Commodity Exchange ended day-time trade 2% lower at 725 yuan ($101.27) a tonne. On the Singapore Exchange, the benchmark December iron ore slid 1.6% to $93.8 a tonne as of 0851 GMT.

“Such a retreat is within expectation after previous rally,” a Chinese iron ore trader said. Contracts on both the bourses had posted weekly gains for three weeks in a row since late October, supported by China’s latest moves to shore up its slowing economy.

“The rising Covid cases exacerbated near-term expectations, also given November and December are the traditional off-peak season for steel demand,” the trader said.

China is fighting a nationwide spike in cases, with the capital city Beijing shutting parks and museums on Tuesday, after warning that it was facing its most severe test of the Covid-19 pandemic. Concerns that Beijing may re-impose strict pandemic curbs and that further restrictions could cause supply-chain disruptions sent Asian shares down on Tuesday.