Iron-ore plunged more than 7% in Singapore -- giving up all its gains this year -- as steel mills idled blast furnaces amid growing pessimism over the demand outlook in China.

The steel-making ingredient has now lost around a fifth of its value in a run of declines that’s extended to an eighth day. Chinese prices of metallurgical coal, used to make steel, were down as much as 12% at the lowest since late February.

Consumption of iron-ore has been hit by China’s slumping property market and the country’s inability to put the coronavirus behind it. While there was some optimism last month that an easing of the current outbreaks would spur a swift rebound in economic activity, that appears to have been replaced by the realities of regular mass testing and the constant threat of more lockdowns.

Blast furnace rates in Tangshan fell last week for the first time since mid-May, with industry consultant Mysteel saying in a note that more mills in the steel-making hub are cutting output to do maintenance due to weak margins. An index of Chinese steel profits has plunged by almost 90% so far this month.

“With the slow spot trade, steel product prices have plunged, with more steel mills now losing money and hastening planned maintenance,” said Wei Ying, a ferrous analyst at China Industrial Futures. However, given the speed of the drop, iron-ore “may have been oversold” and there’s likely to be a rebound in the second half, she said.

Daily spot trading of construction-related steel products is around 11-million to 13-million tons now, compared with 17-million to 19-million tons usually, Wei said.

Downstream demand remains poor with few spot trades occurring, and the bleak outlook for China’s construction industry continues to test market confidence, Mysteel said in a separate note. A raft of supportive policy measures from Beijing in the last couple of months have failed to result in persistent price gains, with risks due to the virus and the Covid Zero policy continuing to hang over the market.

Chinese steel mills have ramped up output since late last year, and appear to be betting that infrastructure stimulus and a swift rebound in property construction will support demand in the coming months, GavekalDragonomics said in a note by analyst Rosealea Yao on Monday. Unless the real-estate sector mounts a stronger rebound soon -- which remains far from certain -- the tension between high output and weak demand will have to be resolved with lower prices, big cutbacks in production, or both, she said.

Iron ore fell 7.4% to $111.20 a ton as of 4:16 p.m. in Singapore. Futures in Dalian sank 8.3% and steel rebar and hot-rolled coil both declined by around 5%. Chinese coking coal futures fell 7.1% to 2,414.5 yuan a ton.