Iron ore futures drop on China steel output curbs, trade uncertainty

BEIJING: Iron ore futures slid on Monday as renewed concerns over demand weighed on the market, pressured by output restrictions in top consumer China’s major steel production hub of Tangshan and lingering uncertainty over US trade tariffs.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) was down 0.68% at 731 yuan ($101.96) a metric ton, as of 0219 GMT. The benchmark August iron ore on the Singapore Exchange dipped 0.1% to $95.75 a ton.

Steelmakers in northern China’s Tangshan city have received notice for environmental protection-related production control, information provider Tangshan Baochun Data said in a note on its WeChat account on Saturday.

Some local mills have undertaken maintenance on parts of their sintering equipment, Tangshan Baochun said, while analysts noted that the move is expected to dampen demand for iron ore.

Additionally, markets remain on edge as the US deadline on trade deals nears, ANZ analysts said in a note.

US President Donald Trump said on Sunday that he is close to finalizing several trade agreements and will notify other countries of higher tariff rates by July 9, with those rates scheduled to take effect on August 1.

Over the weekend, Malaysia said it has imposed provisional anti-dumping duties ranging from 3.86% to 57.90% on certain iron and steel imports from China, among others.

However, resilient near-term demand for iron ore, supported by strong steel margins, helped limit further price declines. Average daily hot metal output, a gauge of iron ore demand, still hovered at 2.41 million tons, as of July 3, and were higher than the same period a year before, despite signs of softening, data from consultancy Mysteel showed.

Other steelmaking ingredients on the DCE recorded losses, with coking coal and coke down 1.06% and 0.56%, respectively. Steel benchmarks on the Shanghai Futures Exchange shed. Rebar dipped 0.45%, hot-rolled coil dropped 0.59%, wire rod fell 0.81% and stainless steel lost 0.51%.