SINGAPORE: Iron ore futures eased on Wednesday, pressured by tit-for-tat tariffs from US and top consumer China, though prospects of brightening Chinese steel demand cushioned the fall.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) fell 0.7% to 776 yuan ($106.76) a metric ton as of 0249 GMT.
The benchmark April iron ore on the Singapore Exchange shed 1.07% to $99.75 a ton.
US President Donald Trump’s doubling of duties on Chinese goods to 20% took effect on Tuesday, prompting swift retaliation from Beijing and spurring trade war concerns.
Beijing has hiked import levies covering $21 billion worth of American agricultural and food products, suspended the soybean import licenses of three US firms and halted log imports.
“Sentiment was also impacted by the prospect of further tariffs,” ANZ analysts said.
US tariffs on steel and aluminium are due to kick in on March 12.
China has kept its economic growth target unchanged at roughly 5%, amping up stimulus to mitigate the impact of rising US tariffs.
The country’s services activity expanded slightly in February, driven by a faster rebound in demand, a private-sector survey showed.
“Both supply and demand of imported iron ore in China are predicted to strengthen in March, usually a month when steel consumption in the country is robust,” Chinese consultancy Mysteel said.
Iron ore slips
“This should keep prices of the steelmaking material firm.” Meanwhile, China said on Wednesday it would promote restructuring of its ailing steel sector by mandating output cuts. Most steel benchmarks on the Shanghai Futures Exchange lost ground.
Rebar dipped 0.27%, hot-rolled coil fell 0.24%, stainless steel eased nearly 0.35%, while wire rod traded flat.
Other steelmaking ingredients on the DCE declined, with coking coal and coke losing 2.19% and 1.82%, respectively.
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