Chinese stocks dropped for a second day, dragging the Shanghai Composite Index to a three-week low, as falling steel prices and transport rates spurred concerns about the country's economic recovery.

Tangshan Iron & Steel Co retreated 3.9 percent after its parent cut prices of reinforcing bars used in buildings for a second month. China Cosco Holdings Co fell 3 percent as a measure of shipping costs for commodities declined. PetroChina Co, the nation's biggest oil company, lost 1.7 percent after crude slipped.

"Judging from falling product prices, the recovery doesn't seem to be very solid and the outlook is still clouded by uncertainty," said Yan Ji, who helps oversee about $1.2 billion at HSBC Jintrust Fund Management Co in Shanghai.