Iron Ore Marks Biggest Monthly Recession Since May 2016

Iron ore futures in China, the largest consumer of the raw material, posted the largest monthly decline since May 2016 amid growing concerns over demand as government inspections cut steel production when inventories were adequate.

The best-selling iron ore contract on the Dalian Commodity Exchange for January delivery closed 0.98 percent lower at 454.5 yuan ($ 68.45) a tonne. This means that the contract fell 19 percent in September, although it rose slightly in the third quarter.

The market is concerned about both the increase in supply and the decrease in demand from China. On the Shanghai Futures Exchange, the most traded construction steel contract reversed its early-trading losses on Friday to close 1.48 percent lower, although it gained about 16 percent quarterly.

Chinese regulators have closed steel mills that do not comply with environmental regulations as part of the government's broader efforts to tackle air pollution ahead of the winter season and as the country prepares its National Party Congress in October.

Trading activity has slowed to a week-long Golden Week holiday in China since Oct. 1, traders and analysts say. Coking coal fell 0.92 percent to 1,113.5 yuan a tonne, but continued to rise 4.2 percent for the quarter.