BEIJING: Iron ore futures prices rebounded on Wednesday, as signs of progress in trade talks between the world’s two largest economies bolstered sentiment, although uncertainty over a final agreement and softening steel demand capped further gains.
Officials from the United States and China, the world’s largest iron ore consumer, agreed on a framework to put their trade truce back on track following two days of intensive negotiations in London.
The development has broadly lifted sentiment in the ferrous market, helping to support prices.
China purchases over two-thirds of global seaborne supply.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) was up 0.86% at 706 yuan ($98.24) a metric ton, as of 0219 GMT.
The contract registered losses of nearly 1% on Tuesday.
The benchmark July iron ore on the Singapore Exchange was 0.55% higher at $94.9 a ton.
Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.35% and 0.67%, respectively.
Iron ore drifts down as China deflation persists
Most steel benchmarks on the Shanghai Futures Exchange nudged higher on firmer costs of raw materials, but soft downstream demand limited gains.
Rebar added 0.61%, hot-rolled coil rose 0.81% and wire rod advanced 0.55%, while stainless steel shed 0.28%.
“Steel consumption has declined rapidly entering the off-peak demand season,” analysts at Galaxy Futures said in a note.
Amid growing concerns over market stability, the state-backed China Iron and Steel Association called on Tuesday for a joint boycott for the ‘rat race’ style competition in response to the spill-over impact of the fierce price war among domestic automakers on the steel market.
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