The volatility is set to persist into 2022 as a rebound in steel production this month falters early next year.

If 2021 was a year of volatility and uneven performances for commodities, then 2022 is shaping up as a rinse and repeat as uncertainty over the recovery from the coronavirus pandemic remains, writes Clyde Russell.

"Analysts expect a rebound in steel output as Beijing's yearly targets have been met, prompting mills to resume production," broker SP Angel said in a note.

Out of the 27 key commodities, Fitch sees 19 of them averaging lower on a year-on-year basis.

The optimism around the metal continued to be tempered by China's rising stockpiles of imported iron ore hitting the highest level since July 2018.

A government consultancy on Wednesday predicted that China's steel demand could dip in 2022 from this year, but consumption from infrastructure construction, automobile and other sectors will continue to offer support.