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Market focus has turned to the People’s Bank of China, which could cut the rate on its medium-term lending facility on Wednesday.

Benchmark 62% Fe fines imported into Northern China fell 1.24% Tuesday morning, to $134.18 per tonne.

The most-traded September iron ore futures contract on China’s Dalian Commodity Exchange ended daytime trading 0.1% lower at 901.50 yuan ($134.11) a tonne, after earlier falling to 882 yuan, the lowest since May 31.

“The risk of further lockdowns remains high while the dynamic-zero covid-19 approach remains in place,” Fitch Ratings said in a statement.

Fitch Ratings cut its economic growth forecast for China this year to 3.7%, from 4.8%, to reflect the impact on the activity of recent lockdown measures.

Still, most research reports remain fairly optimistic about the longer-term outlook for iron ore, despite “headwinds from Shanghai’s partial return to lockdown,” according to analysts in an emailed Morgan Stanley report headed by Marius Van Straaten.

It is projecting a deficit market on a full-year basis, and “a robust recovery in China’s steel production on strong infrastructure spending should drive more price upside” by the third quarter.