Chinese iron ore futures are getting slammed, doubling Friday evening’s losses in early trade on Monday.

The most actively traded September 2017 contract on the Dalian Commodities Exchange currently sits down 5.95% at 545.5 yuan a tonne, having hit a low of 541 yuan earlier in the session.

Here’s the current scoreboard at the mid-session break on Monday.

SHFE Rebar ¥3,075 , -4.09%
DCE Iron Ore ¥545.50 , -5.95%
DCE Coking Coal ¥1,188.00 , -1.00%
DCE Coke ¥1,649.50 , -1.08%

A big, ugly move in anyone’s language.

It now sits at the lowest level since early January this year, and suggests that further downside pressure in spot markets may also follow suit.

On Friday, the spot price for benchmark 62% fines slid by 1.5% to $85.06 a tonne, according to Metal Bulletin, leaving its loss for the week at 7.9%.

Helping to explain the weakness in iron ore contracts on Monday, rebar futures traded separately on the Shanghai Futures Exchange have also tumbled, currently sitting down 4.09% at 3,075 yuan.

While some put the decline in iron ore prices down to mounting inventory at Chinese ports, currently sitting at the highest levels since 2004 according to data form SteelHome, others believe that the outlook for steel prices is now playing an even greater role in determining iron ore prices.

“With iron ore prices so leveraged to steel prices at the moment, market conditions in China’s steel sector are increasingly becoming more important,” Vivek Dhar, mining and energy commodities analyst at the Commonwealth Bank, wrote last week.

“With steel stockpiles now at levels seen in early 2015 on a days of supply basis, we may finally be at the end of China’s restock cycle, curbing a key upside driver for steel prices.

“Iron ore prices should eventually face fewer upside risks as a result,” he said.

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