SINGAPORE: Iron ore futures prices sank on Monday, dragged lower by tit-for-tat tariffs between the US and top consumer China that have widened a global trade war.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 2.6% lower at 768.5 yuan ($105.10) a metric ton.
Earlier in the session, prices fell to 754 yuan, their lowest since March 21.
The benchmark May iron ore on the Singapore Exchange was 2.21% lower at $98.4 a ton.
External shocks to global markets, driven by fresh US tariffs, will pressure iron ore prices in the short term, said broker Galaxy Futures in a note.
Chinese stocks dived on Monday in the face of an intensifying spat between the world’s two biggest economies which threatens to upend trade flows and drive a slowdown in global demand.
China retaliated on Friday with additional 34% tariffs on all US imports, after US President Donald Trump imposed a 34% tariff on most Chinese goods.
Trade war woes have largely countered rising demand for the steelmaking ingredient, as steelmakers ramp up production during the peak construction season in March and April.
Hot metal production, typically used to gauge iron ore demand, logged a monthly increase of 14,500 tons to 2.3873 million tons, according to data from broker Everbright Futures.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 2.16% and 1.1%, respectively.
Steel benchmarks on the Shanghai Futures Exchange languished. Rebar tumbled 2.24%, hot-rolled coil weakened nearly 2.5%, wire rod slid 2.74% and stainless steel plunged 3.65%.
Comments
Comments are closed for this article.