SINGAPORE: Iron ore futures prices declined on Wednesday, pressured by a mandated production cut ahead of a military parade in China and US trade restrictions on steel imports.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.65% lower at 765.5 yuan ($106.51) a metric ton, as of 0247 GMT.
The benchmark September iron ore on the Singapore Exchange was 0.69% lower at $100.35 a ton. With the military parade on September 3 (in Beijing) commemorating the end of World War Two approaching, mandated blast furnace production cuts aimed at improving air quality weigh on raw material prices, said broker Galaxy Futures.
Still, the planned cuts are less severe than earlier market rumours of a full shutdown, limiting the impact on actual demand, analysts from ANZ said in a note on Wednesday.
The US said on Tuesday that it was targeting more imports of Chinese goods, including steel, copper, and lithium, for high-priority enforcement over alleged human rights abuses involving the Uyghurs. At the same time, the US Commerce Department announced that it was widening the 50% tariff on steel and aluminium to more than 400 products to support American industries.
Appeals from companies like Tesla, which argued that available US capacity was not sufficient to produce steel for its electric vehicles, were unsuccessful.
On the supply front, iron ore shipments from top producers Australia and Brazil rebounded week-on-week, with Brazilian mining giant Vale leading the charge, according to data from Chinese consultancy Mysteel.
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