China’s love affair with property may be ending but no one seems to have told iron ore traders. Imports of the transitional metal used for construction steel rose in 2023 compared to the previous year. Iron ore’s price gains made it one of the best performing commodities of the year, up over a fifth by mid December.

That is odd. Chinese steel mills appear to be losing money when producing basic steel for construction. Both coking coal and iron ore are relatively expensive. Steel prices have had a mini rebound since mid-October but Chinese mills will not continue to produce at a loss indefinitely.

China’s steel output is starting to fall. In October, this figure dropped below an annual rate of 900mn tonnes. That is lower than the seasonal five-year range. In part, this is because of a slow down of domestic real estate-related construction, which accounts for 35 per cent to 40 per cent of Chinese steel demand.