SINGAPORE: Dalian iron ore futures hit their highest levels in nearly three weeks on Wednesday, underpinned by hopes of US-China trade talks and strengthening seasonal demand for the steelmaking ingredient.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) climbed 2.11% to finish at 727.5 yuan ($99.73) a metric ton.
Earlier in the session, prices hit 731 yuan, their highest since April 3. The benchmark May iron ore on the Singapore Exchange was 1.61% higher at $100.2 a ton, as of 0708 GMT. Steel production in China has continued to increase and the downstream demand for building materials has picked up, said broker Galaxy Futures in a note.
“Increased buying by mills and lower imports have depleted iron ore inventories,” said ANZ. Inventories of five major carbon steel products held by Chinese steel mills fell 5% on-week as of April 17, said consultancy Mysteel, attributing the decline to resilient domestic steel demand. Still, while China’s property indicators are improving, prospects of significant recovery look feeble, added ANZ.
Also boosting sentiment were hopes of a de-escalation in trade tensions between the United States and China. US Treasury Secretary Scott Bessent said on Tuesday that he believes that trade tensions with China will ease, though he described future negotiations as a “slog” that has not started yet.
US President Donald Trump expressed optimism that he would make progress with China that would substantially lower their tariffs. Still, India on Monday imposed a 12% temporary tariff on some steel imports, locally known as a safeguard duty, to curb a surge in cheap shipments from China. Other steelmaking ingredients on the DCE jumped, with coking coal and coke up 2.56% and 3.14%, respectively.
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