MANILA: Iron ore futures wobbled on Friday and were on track for weekly losses due to waning optimism over prospects for demand recovery in top steel producer and metals consumer China, with additional pressure from rebounding supplies from Australia and Brazil.

The most-traded September iron ore on China’s Dalian Commodity Exchange dropped as much as 3.6% to 685.50 yuan ($99.17) a tonne, its weakest since May 5, keeping it on track for a sixth consecutive weekly decline.

On the Singapore Exchange, the steelmaking ingredient’s benchmark June contract was up 1% at $99.55 a tonne, as of 0306 GMT, after earlier hitting $96.90, its lowest since May 5.

SGX iron ore has slumped more than 20% since hitting this year’s peak at about $131 a tonne in mid-March, as the initial euphoria over China’s lifting of COVID-19 restrictions and supportive measures for the struggling property sector had abated.

The current macroeconomic backdrop has turned out uninspiring, raising concerns about whether China could sustain its 4.5% year-on-year GDP growth in the first quarter.

Data on Thursday showed new Chinese bank loans tumbled far more sharply than expected in April, adding to worries that the economy’s post-pandemic recovery is losing steam and putting pressure on the central bank to ease policy.

Meanwhile, many Chinese steel mills have reportedly lowered their prices amid disappointment over steel demand during the country’s peak spring construction season. “With the peak construction season coming to an end and with the expected demand recovery not meeting expectations, there is little upside for steel output and iron ore demand recovery in the short to medium term,” said ING commodities strategist Ewa Manthey.

Rebar on the Shanghai Futures Exchange shed 0.9%, hot-rolled coil lost 1.3%, wire rod dipped 0.4%, and stainless steel dropped 0.3%. Coking coal and coke on the Dalian exchange, however, gained 0.1% and 0.4%, respectively, in a wobbly trade.