MANILA: Dalian iron ore hit a three-week low on Thursday on expectations that China’s demand for the steelmaking ingredient will remain sluggish during the typical summer lull in domestic construction activity.

The benchmark iron ore contract in Singapore somewhat stabilized after a five-session sell-off, suggesting that near-term prices may have bottomed out. The most-traded September iron ore on China’s Dalian Commodity Exchange ended morning trading 1.8% lower at 684 yuan ($98.96) a tonne. It earlier hit 676.50 yuan, its weakest since May 5.

On the Singapore Exchange, the most-active June iron ore was up 0.6% at $96.05 a tonne by 0400 GMT, after hitting a three-week low of $94.80 earlier in the session.

SGX iron ore has now fallen more than 15% this year, surrendering earlier gains as the initial optimism around China’s demand prospects this year had faded away, and worries prevailed over the country’s sputtering economic recovery and steel production control. China is likely to import a similar amount of iron ore this year as it did in 2022, with demand failing to show signs of recovery, according to participants at an industry conference in Singapore this week.

Chinese steel demand during the peak spring construction season was below expectations, and it is not expected to improve with the summer lull around the corner.