BEIJING: Iron ore futures prices were subdued on Tuesday, as fresh tariff threats from US President Donald Trump fuelled concerns about demand prospects.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.7 percent lower at 776.5 yuan (USD108.56) a metric ton, after touching the highest since August 14 on Monday.
The benchmark September iron ore on the Singapore Exchange was down 0.93 percent at USD102.3 a ton, as of 0654 GMT. Trump said on Monday China has to give the United States magnets or “we have to charge them 200 percent tariff or something” amid a trade dispute between the two nations. Trump also threatened countries that have digital taxes with “subsequent additional tariffs” on their goods if those nations do not remove such legislation.
Those threats came after the US clinched trade deals with several countries and regions after multiple rounds of negotiations, easing fears of a global recession that will hurt demand for commodities. Iron ore prices have declined in the past year amid falling demand from top consumer China, which is grappling with deflation and weak consumer confidence.
Lower iron ore prices have squeezed profits of several major miners. Australia’s Fortescue reported its smallest annual profit in six years, while BHP’s annual profit fell to the lowest in five years. Coking coal and coke, other steelmaking ingredients on the DCE, erased earlier gains to fall 3.17 percent and 2.41percent, respectively.
Most steel benchmarks on the Shanghai Futures Exchange weakened. Rebar shed 0.99 percent, hot-rolled coil fell 0.71 percent, wire rod lost 0.89 percent, while stainless steel inched up 0.08 percent.
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