Iron ore futures slumped on Thursday on fresh concerns about China’s steel production curbs and recovery prospects for the struggling domestic property sector, with sentiment further dampened by flooding in the top steelmaking province of Hebei.

The most-traded September iron ore on China’s Dalian Commodity Exchange ended daytime trading 3% lower at 810.50 yuan ($112.70) per metric ton, after earlier hitting 808.50 yuan, its weakest since July 12.

On the Singapore Exchange, the steelmaking ingredient’s benchmark September contract SZZFU3 was down 4% at $99.70 per metric ton, as of 0803 GMT, after touching $99.40, its lowest since June 29.

Prices of other steelmaking ingredients also fell, with losses on the Dalian exchange widening during afternoon trading amid market chatter about steel output curbs in China, the world’s biggest steel producer.

The flooding in Hebei from record rainfall added to market worries about local steel production.

Coking coal DJMcv1 and coke DCJcv1 sank 5% and 6.2%, respectively.

“There have been renewed production curbs, which are likely to be more effective given unattractive steel mill margins,” ANZ analysts said in a note.

Steel mills in Yunnan province have been asked to prepare to cut back production to meet a government mandate on capping 2023 output at last year’s level, according to some Chinese consultancies.

“Limited signs of fresh policy stimulus and ongoing weakness in residential property markets in China” weighed on sentiment, Westpac analysts said in a note.

Some Chinese city governments have made it harder for developers to access tens of billions of dollars from property sales held in escrow accounts, Reuters reported, citing people familiar with the matter.

The tightening appears to run contrary to Beijing’s assurance that it will help stabilise the sector.

Rebar on the Shanghai Futures Exchange SRBcv1 fell 2.8%, hot-rolled coil SHHCcv1 shed 1.8%, wire rod SWRcv1 lost 2.3%, and stainless steel SHSScv1 dipped 0.8%.

Source: Reuters