Chinese iron ore is in full scale retreat, as investors worry about weakening demand for commodities like steel and iron in the world's second biggest economy.
Chinese iron ore futures tumbled eight percent on Thursday, closing at their downside limit of 485 yuan per tonne. It was their biggest single-day fall in more than five months.
Other so-called 'black series" commodities, like Shanghai rebar steel and coking coal, slumped more than six percent at 2,931 yuan per ton. Meanwhile in Singapore, ore prices fell as much as 9.1 percent.
Data shows that port stockpiles of steel are at near record highs. Production output also reached a record 72 million tons in March and remained at a high level in the first 20 days of April.
Analysts said demand could be even worse in May than April, and they remain bearish on commodities. Another reason to blame is the liquidity crunch, as the Chinese government further tightens money outflows. Environmental factors also play a role in the price drops.
However, commodities giant Rio Tinto has said it is not worried about the Chinese commodities market, and believes the outlook remains positive for the year ahead.
