BEIJING: Dalian iron ore futures prices rose for a second consecutive session on Thursday, aided by lingering concerns over weather-related supply disruptions in major exporter Australia.
However, fears of a major global trade war after US President Donald Trump’s fresh tariffs on steel and aluminum imports curbed gains.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) climbed 0.3% to 823 yuan ($112.64) a metric ton by 0209 GMT.
Australian shipments are expected to fall further after Port Hedland, the world’s largest iron ore export hub, closed on Wednesday due to tropical cyclone Zelia.
Hot metal output, typically used to gauge iron ore demand, has been increasing at a pace faster than the same period the year before, while the recovery in downstream steel demand has also beaten expectations, analysts at Shengda Futures said in a note.
Also supporting prices was anticipation that steelmakers may still need to restock iron ore to meet production needs after the Lunar New Year holidays.
However, the benchmark March iron ore on the Singapore Exchange was 0.24% lower at $107.55 a ton, as of 0206 GMT, after hitting its highest in nearly four months on Wednesday.
Iron ore rebounds
“Investors worry about a possible domino effect triggered by Trump’s latest tariff,” said Zhuo Guiqiu, analyst at Jinrui Futures.
India could impose a temporary tax of 15%-25% on steel from China in as soon as six months because of the “serious challenge” to domestic producers from cheap imports after Trump’s fresh tariffs.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 0.8% and 0.87%, respectively.
Steel benchmarks on the Shanghai Futures Exchange moved sideways.
Rebar nudged down 0.09%, hot-rolled coil edged down 0.06%, while wire rod added 0.17% and stainless steel advanced 1.1%.
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