SINGAPORE: Dalian iron ore futures prices fluctuated within a narrow range on Thursday, as investors weighed expectations of additional stimulus measures to boost consumption in China against trade concerns and reports of steel production cuts.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) was flat at 776 yuan ($107.14) a metric ton, as of 0302 GMT.
The benchmark April iron ore on the Singapore Exchange edged 0.6% higher to $100.35 a ton. Chinese equities rose on Wednesday after Beijing pledged more stimulus to boost consumption and cushion the impact of an escalating trade war with the United States.
Washington has so far added an extra 20% on existing tariffs for Chinese goods, with the latest 10% increment enforced on Tuesday, drawing Beijing’s retaliation.
The US needs tougher legislation to enforce trade laws against Chinese government-subsidised companies that circumvent US tariffs by shipping goods through third countries, US companies said on Wednesday.
New US steel tariffs are set to disrupt Chinese trans-shipment of steel to the United States, Reuters previously reported. Meanwhile, in March, the average daily molten iron output is expected to increase to about 2.329 million tons, broker Hexun Futures said, adding that demand for the steelmaking material has recovered in China.
Still, news of production cuts intensified the downward pressure on prices, Hexun said. China will restructure its giant steel industry through output cuts, although it did not announce any target in its most recent intervention to address overcapacity in the sector. Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 0.7% and 0.42%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange climbed. Rebar gained nearly 0.3%, hot-rolled coil edged 0.44% higher, stainless steel was up 1.06%, while wire rod eased 0.32%.
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