By Dhirendra Tripathi

Investing.com – Stocks of steel and iron-ore producers took a knock in global markets Monday on fears over the cascading impact of the crisis unfolding at real estate developer China Evergrande  (OTC:).

ADRs of ArcelorMittal (NYSE:) fell 5.5%, BHP (NYSE:) 5.4%, Rio Tinto (NYSE:) 6% and Vale (NYSE:) 3% in Monday’s premarket trading on the NYSE. Elsewhere, Anglo American (LON:) fell 7% in London and Fortescue Metals closed (ASX:) 4% lower in Sydney.

Evergrande shares dropped more than 10% in Hong Kong as Evergrande, a beleaguered developer started to sell assets at steep discounts. Traders stayed jittery as China’s second largest property developer has a bond interest due Thursday, according to Reuters.

It is possible that China’s third-largest property developer could default on $300 billion worth of debts, which would increase the risks to China’s financial system.

Shares of metals and iron-ore have lately been under pressure as the world’s biggest consumer attempts to limit its steel output at last year’s level of around 1.05 billion tons. UBS estimates that the output of steel will likely be at or near 1.07 million tons by 2021-22. It is expected to fall to 0.22 billion in 2022-23. It is 5% less than the 1.13 billion ton forecast.

Uncertainty ahead of this week’s central bank meeting is also weighing heavily on the markets. Most notably, the U.S. Federal Reserve.

Two-day Fed meeting begins Tuesday. All eyes are on the central bank’s likely commentary on the timeline of the tapering. According to Reuters market consensus, the central bank will not change its plans to withdraw stimulus this year. However, it may delay giving details for at most a month.