(Bloomberg) — Iron ore is one the poorest performing commodities this year, and the rout in prices is only likely to deepen until China’s economy stages a revival.

“There is probably more downside ahead, as there is no clarity yet around the end of Covid lockdowns and no clear outline of economic measures to boost China’s economy,” said Gavin Wendt, founding director of Sydney-based MineLife Pty. That means tough times and margin pressures at steel mills are likely to continue, he said.

Futures in Singapore have fallen for seven straight months, the worst run since the contract debuted in 2013. At around $81 a ton, the mineral costs about a third of its peak in May last year.

China is by far the biggest buyer of iron ore, mainly from Australia and Brazil, to feed annual steel production that has topped 1 billion tons in the last two years. As such, it’s one of the defining raw materials of China’s economy, and a stalwart of a commodities boom that risks becoming a distant memory as the property market teeters and Beijing persists with its growth-crippling virus controls.

Hopes that conditions would improve in the autumn, the peak season for Chinese construction activity, were dashed by the end of the Communist Party Congress in October. The twice-a-decade meeting failed to deliver large-scale support for the real-estate sector, and didn’t chart a path out of the thicket of Covid Zero rules that have hobbled demand across commodities and disrupted operations from malls to factories and building sites.

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