(Bloomberg) — Industrial materials from copper to iron ore are feeling the pain as China steps up efforts to cool a blistering rally in commodities that’s fanning fears over a global surge in inflation.Iron ore futures plunged as much as 11% in Singapore and steel rebar slid as Chinese officials rolled out fresh measures for steelmakers to take the steam out of markets. Base metals have also come under pressure in recent days, with copper down 4.7% from a record high set on Monday.The measures targeting China’s steel sector come after surging raw-material costs sparked the biggest jump in Chinese factory-gate prices in more than three years in April. A sharp jump in U.S. consumer prices has also sparked worries across financial markets that rising inflation will hamper a global recovery and force the Federal Reserve to tighten policy sooner than thought.“Many fear that high inflation will force the Fed to take away the punch bowl,” which acted as one of the forces in propelling a rally in commodities from their nadir in March last year, TD Securities analysts led by Bart Melek said in a note. “Ongoing deleveraging in China should take some wind out of the sails for commodity demand.”Copper and iron ore have been among the biggest gainers in a yearlong rally in commodities as Covid-19 upended supply while stimulus measures supported economies and sparked a surge in demand, particularly in China. An accelerating global decarbonization drive has also transformed the long-term outlook for metals like copper.But signs of easing short-term supplies and softening demand may be emerging in physical markets. LME metal has flipped into contango, a market structure in which spot prices trade below those three months out. That indicates loose supply or falling demand in the near term. Right now, it’s gapped out to the weakest since early January.“Copper will still trade at a very good price, but I do think it will come under pressure,” Colin Hamilton, managing director for commodities research at BMO Capital Markets, said by phone from London. “There are some headwinds coming.”Still, U.S. retail sales stalled in April following a sharp advance in the prior month when pandemic-relief checks provided millions of Americans with increased spending power. This could help the narrative by Fed officials this week that inflation numbers this week were an aberration and were transitory.Copper fell 1% to settle at $10,240.50 a ton at 5:53 p.m. on the London Metal Exchange, after peaking Monday at $10,747.50. Other base metals fared better on Friday, though aluminum still had a 3% weekly drop.In ferrous markets, iron ore fell 4.3% in Singapore on Friday, while futures in Dalian dropped the daily limit. Iron ore had surged to record highs recently amid the broad commodities boom.Prices slumped as Tangshan’s local government vowed to punish violations including price manipulation, and steelmakers were told that they may be suspended from doing business or have their licenses revoked if they break the law. The city, which accounts for 14% of China’s steel output, has been at the center of an industry overhaul as authorities unveiled a slew of output restrictions to control emissions.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.