SINGAPORE: Iron ore futures declined on Friday amid continuing uncertainty over Sino-US trade tensions, but were set for weekly gains on strengthening near-term demand in top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.48% lower at 719 yuan ($98.53) a metric ton, as of 0244 GMT. The contract rose 1.63% this week.
The benchmark May iron ore on the Singapore Exchange was 0.3% lower at $99.15 a ton, but was up 1.59% so far this week.
There will be strong short-term demand for iron ore consumption as steel end-users seek to replenish their supplies before the May Day holiday, said broker Hexun Futures.
Hot metal output has increased by 42,300 tons month-on-month to 2.4435 million tons in April so far, marking an increase of 156,300 tons year-on-year, said broker Everbright Futures.
Hot metal output is typically used to gauge iron ore demand. Port inventories of iron ore were at 147.81 million tons, increasing roughly 1.56% on-month, Everbright said. Broadly, while Washington’s stance on China has softened, investors are still in the dark on where things currently stand with China. President Donald Trump asserted on Thursday that trade talks between the US and China are underway, pushing back against Chinese claims that no discussions have taken place to ease the ongoing trade war. Conflicting statements from Washington and Beijing underscore the uncertainty defining the trade war, adding volatility to global markets.
Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.88% and 0.54%, respectively. Steel benchmarks on the Shanghai Futures Exchange traded sideways. Rebar gained nearly 0.3% and hot-rolled coil rose 0.37%, while wire rod eased 0.36% and stainless steel was down 0.43%.
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