SINGAPORE: Iron ore futures prices edged higher on Tuesday, supported by growing demand for the steelmaking ingredient in top consumer China, although trade war concerns and upcoming U.S. tariffs capped the gains.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) was up 0.39% at 780.5 yuan ($107.47) a metric ton, as of 0240 GMT.
The benchmark May iron ore on the Singapore Exchange was trading 0.51% higher at $101.5 a ton.
“A further increase in the hot metal output at Chinese steelmakers lent some support to the prices of imported iron ore last week,” said Chinese consultancy Mysteel.
Hot metal production in March continued to increase by 10,200 tons to 2.3728 million tons month-on-month, and the daily consumption of imported ore logged a monthly jump of 13,200 tons, said broker Everbright Futures.
Hot metal output is typically used to gauge iron ore demand.
“Whether the strength in ore prices could be maintained is subject to the sustainability of downstream demand recovery,” Mysteel added.
Iron ore futures dip
Broadly, China’s factory activity expanded at its fastest pace in four months in March, buoyed by stronger demand and robust export orders, a private-sector survey showed on Tuesday.
Despite this, Chinese equities fell on Monday as trade war concerns heightened, weighing on sentiment.
U.S. President Donald Trump said on Sunday that reciprocal tariffs he is set to announce this week will include all nations, not just a smaller group of 10 to 15 countries with the biggest trade imbalances.
Trump has promised to unveil a massive tariff plan on April 2.
Other steelmaking ingredients on the DCE traded mixed, with coking coal down 0.5% and coke up 1.48%.
Most steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar was down 0.44%, hot-rolled coil edged 0.15% lower, wire rod weakened 0.5%, while stainless steel gained around 0.6%.
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