BEIJING: Iron ore futures slid on Wednesday to their lowest levels in more than six months, as demand prospects were clouded by the escalation of a global trade war triggered by US President Donald Trump’s broad tariffs.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.68% lower at 689 yuan ($93.74) a metric ton.
Earlier in the session, the contract hit its lowest point since September 24 at 670.5 yuan a ton. The benchmark May iron ore on the Singapore Exchange was trading 1.16% lower at $93.65 a ton, as of 0712 GMT. The contract had earlier dropped to its lowest level since September 24, reaching $91.70 per ton.
Both benchmarks recouped some of their earlier losses as sentiment improved following news that China’s top leaders plan to hold a meeting to discuss measures to boost the economy and stabilise capital markets. The US said on Tuesday that 104% duties on imports from China will take effect shortly after midnight, following Beijing’s refusal to yield to what it described as blackmail, with a vow to “fight till the end”.
“The impact of the heightened tariffs on the market have aggravated, pressuring iron ore prices in the short term,” analysts at First Futures said in a note. Other steelmaking ingredients on the DCE similarly slumped on Wednesday, with coking coal and coke down 4.03% and 3.24%, respectively.
Steel benchmarks on the Shanghai Futures Exchange slipped on lower raw material prices. Rebar fell 1.37%, hot-rolled coil shed 1.11%, wire rod lost 0.4% and stainless steel retreated 1.9%. Intensified concerns over the demand outlook, worsened by escalating trade tensions between the world’s two largest economies, have further undermined prices for steel and steelmaking ingredients.
Analysts said the expectation of reduced domestic steel consumption in the coming months, along with construction activities being hindered by the summer’s high temperatures, also weighed on the ferrous market.
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