(Bloomberg) -- Iron ore’s recent mini-recovery can’t mask the fact that China’s push for a less property-intensive economy will keep demand subdued for years to come.

Pockets of strength in the Chinese steel market have boosted the raw material after a plunge below $100 a ton in early April. Surging steel exports, signs of life in factory activity, and hopes for more policy support from President Xi Jinping’s government have all helped.

But at a major industry gathering in the iron-ore trading hub of Singapore this week, the murky prospects for Chinese real estate were still a major worry for market participants.

“There’s no real sign that things are turning around on construction,” said Atilla Widnell, managing director at Navigate Commodities Pte., who was at the gathering in the city-state. “Manufacturing was a bright spot but it has slowed. The bulls point to steel exports but you only get strong exports when the domestic market is in bad shape.”

China’s construction frenzy in the first two decades of this century supercharged iron ore demand and delivered massive profits to mining giants like BHP Group Ltd. and Rio Tinto Group. However, Beijing now wants an economy geared more toward high-tech and green manufacturing.

“The slowdown is structural, and there’s nothing that can compensate for the decline in construction steel demand,” said Tomas Gutierrez, an analyst at Kallanish Commodities, who was also in Singapore.

More Upbeat

Still, that doesn’t preclude short-term moves higher for iron ore, which touched $120 a ton this week before slipping. Futures in Singapore were at $115.45 by 7:51 a.m. on Friday, down 1.4% for this this week.

Among the more bullish commentators is Mengtian Jiang, chief analyst for iron ore at consultancy Horizon Insights, who sees prices touching $140 a ton this year. Beijing’s policy measures — such as special bonds to fund infrastructure — as well as a steel restocking cycle outside China will help demand, she said.

Brazilian miner Vale SA also sounded more upbeat on short-term demand for the property sector as government stimulus measures feed through in the second half. 

But skeptics are not hard to find. Citigroup sees iron ore anchored around $110 this quarter and next. Macquarie Group Ltd. sees an average of $116 a ton in 2024, and Navigate said the “general view” at the conference was that prices should be closer to $100.

“Local government funding remains a risk, weighing on infrastructure investment and spending, while several traders mentioned that the market is overly optimistic on the ability of the central government to lever up and provide further stimulus,” Citigroup analysts said in a note.

They also flagged risks to the booming steel export trade that has helped soften the blow of a domestic slowdown. Overseas shipments in the first four months of the year have been running at their highest rates since 2016.

Read More: China’s Surging Steel Exports Are Inflaming Global Trade Tension

“Rising protectionism is a major headwind for China steel and manufactured goods exports,” Citigroup said. The amount of steel contained in exported goods has also been on the rise, HSBC Holdings Plc said in a note last month. 

Overall, Beijing has refrained from deploying the type of massive infrastructure spending that it has used in the past. 

“Steel margins have continued to be weak over an extended period of time,” Anant Jatia, founder and chief information officer of Greenland Investment Management, said at the Singapore conference on Wednesday. “And if you don’t see steel margins improving, it’s very hard to see demand for iron ore pick up.”

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