Iron-ore swaps dropped the most in almost six weeks alongside declines in steel futures and equities on speculation China’s call for real-estate curbs would curb demand for the commodity used in construction materials.

The March contract tumbled 2.6 percent to $148.50 a dry metric ton as of 8:26 a.m. in London, according to GFI Group Inc. It headed for the biggest decline since Jan. 11, based on data from SGX AsiaClear, the largest clearer of the derivatives used to hedge prices and bet on Chinese growth.

Chinese Premier Wen Jiabao urged local authorities to “decisively” curb real-estate speculation and take steps to rein in the property market. October contracts for steel reinforcement bars used in construction fell as much as 3.2 percent to 4,048 yuan ($648) a ton on the Shanghai Futures Exchange. The MSCI All-Country World Index of equities lost 0.9 percent at 10:14 a.m. in London and the Standard & Poor’s GSCI Index of 24 raw materials retreated 0.9 percent.

“The government wants to control housing costs, so there will be less property speculators and demand,” Peter Cho, an iron-ore derivatives broker at ICAP Energy Ltd. in Singapore, said by e-mail today. “Sentiment finally turned. Physical traders are no longer holding in hopes of higher prices.”

Ore with 62 percent content at the Chinese port of Tianjin, a global benchmark, surged 83 percent to $158.90 a ton since an almost three-year low on Sept. 5, according to The Steel Index Ltd.

Source: Bloomberg