China's crude steel output reached a record 72 million tonnes in March as mills ramped up output in anticipation of a pickup in demand that has remained slow, government data released on Monday showed.
The price of iron ore fell by nearly 5% to near a six-month low. The newswire reports that iron ore and steel are on track for their worse monthly performance since May 2016.
The most-traded iron ore on the Dalian Commodity Exchange closed down 6.5 percent at 468 yuan ($68) a tonne, just off a session trough of 463.50 yuan, its lowest since January 9. Earlier in the session, prices hit 491 yuan, their lowest since January 10.
The most-active rebar on the Shanghai Futures Exchange fell 3.7 percent to end at 2,824 yuan per tonne, after earlier hitting a session low of 2,815 yuan, a level last seen on February 7. It touched 2,879 yuan last Thursday, its weakest in more than two months.
Citi has a price target somwewhere in the $50s for iron ore in 2018.
Several iron ore producer stocks fell in Tuesday trading as the commodity used in making steel dropped to near six-month lows amid a glut of Chinese steel. Brazil's Vale (VALE) dipped 0.23% to $8.70 a share and BHP Billiton (BHP) sat unchanged at $36.09 a share, while Rio Tinto (RIO) inched 0.02% lower and Freeport-McMoran (FCX) fell 0.Iron3%.