Benchmark iron ore futures on the Dalian exchange dipped 0.4% to 590 yuan ($92.18) a tonne. 

Metals prices reached multi-year highs on supply fears in October, but the main driver now is arguably turbulence in China’s demand.

“The backdrop of China’s deleveraging push, commodity inflation and power crunch suggests China’s domestic growth may be faltering, and weak enough to bring shakiness to the recovery and commodity demand for the rest of 2021,” Bloomberg Intelligence analyst Henik Fung wrote in a note focused on the oil market.

“Steel production costs are very high now. Mills and coking plants are gaming how much room is there left for further adjustment between spot and futures prices,” said Wang Yingwu, analyst with Huatai Futures in Beijing.

Metals are still at “sky-high levels” even relative to China’s recent weak factory data, analysts from Capital Economics wrote in a note this week.

“This adds to our view that prices have quite a long way to fall over the next year or so as constraints on supply caused by power shortages start to fade.”