BEIJING: Iron ore futures prices slid on Friday on signs of softening near-term demand and growing caution over the resolution of the Sino-US tariff war, although a trade truce between the two countries kept prices on track for a weekly gain.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.75% lower at 729.5 yuan ($101.3) a metric ton, as of 0228 GMT, registering a rise of 4.7% so far this week.
The benchmark June iron ore on the Singapore Exchange was down 0.68% at $100.5 a ton, as of 0220 GMT, a gain of 3.7% this week.
Average daily hot metal output, a gauge of iron ore demand, slid 0.4% from the prior week to around 2.45 million tons as of May 15, a survey from consultancy Mysteel showed, weighing on sentiment and prices.
But some analysts and traders expected limited downside for hot metal output in at least May and June as profit margins encouraged mills to maintain high operating rate and the easing trade tensions will likely spur another wave of front-run shipments of steel products.
Analysts at Benchmark Mineral Intelligence forecast an annual average ore price at $100 amid the jostling of subdued demand outlook amid potential China steel production curbs and renewed optimism over easing trade tensions.
Other steelmaking ingredients on the DCE slipped, with coking coal and coke down 2.88% and 1.49%, respectively.
Steel benchmarks on the Shanghai Futures Exchange also retreated.
Rebar shed 0.51%, hot-rolled coil lost 0.55%, wire rod languished 0.38% and stainless steel dipped 0.42%.
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