BEIJING: Dalian and Singapore iron ore futures fell on Thursday amid growing caution following a slowdown in China’s consumer inflation in February, while transaction volumes of construction steel products also contracted.

China’s consumer price index for the month was 1.0% higher than a year earlier, against a 2.1% annual rise in January, as consumers remained cautious despite the abandoning of tough pandemic controls late last year, data from National Bureau of Statistics showed. Meanwhile, China’s daily transaction volumes of construction steel products fell 22.61% on March 8 from the day before to 147,579 tonnes, data from consultancy Mysteel showed.

The most-traded May iron ore futures contract on China’s Dalian Commodity Exchange ended 0.16% lower at 909.5 yuan ($130.52) a tonne as of 0215 GMT. On the Singapore Exchange, the benchmark April iron ore was at $125.65 a tonne, down 0.94%.

“It’s just a normal downward correction, reflecting that people are concerned about demand after April,” said Yu Chen, a Shanghai-based senior iron ore analyst at Mysteel. Similarly, other steelmaking ingredients including coking coal and coke, as well as steel products, also recorded losses.

Coking coal dipped 1.9% and coke fell 2.38%. Rebar on the Shanghai Futures Exchange declined 0.42% to 4,233 yuan a tonne, hot-rolled coil was little changed, wire rod lost 0.73%, and stainless steel moved down 0.72%.

Despite the weakness in the ferrous market, some analysts and traders remained optimistic about the recovery in the downstream demand in the near term.

“We believe fundamentals [of the ferrous market] will be stable or in line with expectations in the short term. And the hot metal output will gradually peak in March,” said Yao Xinying, a Shanghai-based research director of the ferrous market at consultancy SMM.