BEIJING: Iron ore futures prices edged lower on Friday and were poised for a weekly loss, as escalating trade tensions between the United States and China - the world’s two largest economies - clouded the outlook on demand.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.36% lower at 700.5 yuan ($95.73) a metric ton, as of 0156 GMT.
It has lost 5.8% so far this week.
The benchmark May iron ore on the Singapore Exchange fell 1.07% to $96.1 a ton, bringing its weekly decline to 5.6%.
Iron ore rebounds as widening Sino-US trade war raises China stimulus hopes
US President Donald Trump hiked tariffs on Chinese imports to 125% soon after Beijing retaliated with lifting tariffs on American goods to 84% from 34% earlier.
Fears lingered whether China will respond in kind with even high tariffs.
Trade tensions showed no signs of easing, ANZ analysts said in a note, warning that a worst-case scenario could tip the global economy into a recession.
That has broadly weighed on sentiment in the metals market despite a short relief after Trump, in a stunning U-turn, announced a 90-day pause on the hefty duties for trading partners that didn’t retaliate.
However, resilient near-term demand for iron ore and optimism over potential stimulus measures helped limit loss.
Average daily hot metal output, typically used to gauge iron ore demand, rose for a seventh consecutive week, climbing 0.6% from the previous week to a 17-month high of 2.4 million tons as of April 10, a survey from consultancy Mysteel showed.
Other steelmaking ingredients on the DCE lost further ground, with coking coal and coke down 2.67% and 1.62%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar was little changed, hot-rolled coil dipped 0.37%, stainless steel shed 0.43% while wire rod added 0.24%.
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