BEIJING: Iron ore futures flitted sideways on Friday, but were on track 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) closed daytime trade 0.71% higher at 708 yuan ($96.70) a metric ton, registering a weekly loss of 4.8%.
The benchmark May iron ore on the Singapore Exchange was down 0.14% at $97 a ton, as of 0705 GMT, bringing its decline so far this week to 4.8%.
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 2.72% and 1.42%, respectively. Most steel benchmarks on the Shanghai Futures Exchange ticked higher. Rebar added 0.26%, stainless steel advanced 0.4%, wire rod rose 0.21% while hot-rolled coil dipped 0.12%.
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