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) closed daytime trade 0.95% lower at 728 yuan ($101.11) a metric ton, registering a weekly rise of 4.5%.
The benchmark June iron ore on the Singapore Exchange was down 0.83% at $100.35 a ton, as of 0703 GMT, a gain of 3.5% so far this week. Both benchmarks have risen around 3% so far in May.
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 rates, 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, reflecting subdued demand outlook, potential China steel production curbs and renewed optimism over easing trade tensions.
Other steelmaking ingredients on the DCE slipped, with coking coal tumbling 3.84% to the lowest level in more than eight years while coke fell 1.93%. Steel benchmarks on the Shanghai Futures Exchange also retreated. Rebar shed 1.15%, hot-rolled coil lost 0.95%, wire rod languished 1.25% and stainless steel dipped 0.65%.
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