BEIJING: Iron ore futures dipped on Friday, but were headed for a weekly gain due to resilient demand, upbeat economic data and hopes of more stimulus from top consumer China, although the lingering Sino-US trade tensions capped gains.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) closed morning trade 0.84% lower at 705.5 yuan ($96.69) a metric ton, gaining 0.2% so far this week.
The benchmark May iron ore on the Singapore Exchange fell 0.16% to $97.65 a ton, as of 0334 GMT, but rose 0.5% so far this week. Near-term demand firmed, underpinning prices of the key steelmaking ingredient.
A Mysteel survey showed average daily hot metal output, a gauge of iron ore consumption, steadied at a nearly 17-month high of 2.4 million tons on Thursday.
Moreover, a raft of better-than-expected Chinese data, coupled with hopes of Beijing unveiling more measures to counter the US tariff shocks, boosted sentiment and prices.
However, downside pressure persisted, with Goldman Sachs analysts forecasting iron ore prices to fall to $90 by the fourth quarter and $80 by the fourth quarter in fiscal 2026, citing a return to surplus from the second half of the year.
“We expect tariffs to weigh on both China domestic demand and steel exports over the remainder of the year.”
Even as US President Donald Trump signalled a potential end to the tit-for-tat tariff hikes between the US and China that shocked markets, all eyes are on more progressive signs of easing trade tensions between the two superpowers.
Iron ore futures gain
Other steelmaking ingredients on the DCE languished, with coking coal and coke down 3.13% and 2.08%, respectively. Most steel benchmarks on the SHFE retreated.
Rebar lost 0.58%, hot-rolled coil and stainless steel fell 0.66%.
Wire rod advanced 0.57%.
American Dollar Exchange Rate