SINGAPORE: Iron ore futures traded within a tight range on Tuesday, as investors weighed strengthening near-term demand in China against conflicting statements about trade talks from Washington and Beijing. The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) was little changed at 707.5 yuan ($97.26) a metric ton, as of 0238 GMT.
The benchmark May iron ore on the Singapore Exchange dipped 0.16% to $98.25 a ton. Iron ore futures fell amid pressure on the Chinese market to reduce inventories amid the uncertainty that the trade war with the US presents, said ANZ.
US President Donald Trump insisted there has been progress with China, and that he has spoken with President Xi Jinping. Beijing has denied trade talks are occurring. China advanced this year’s stimulus plans but is holding off on fresh measures, though the decision to withhold additional stimulus disappointed investors, leading to a 3% slump in Chinese real estate stocks on Monday. On the supply side, Australian miner Fortescue posted higher third-quarter iron ore shipments.
However, prices were supported by resilient demand for the key steelmaking ingredient. “Prices for imported iron ore at China’s ports...gained some ground on April 28, as downstream replenishing demand persists ahead of the five-day Labour Day holiday over May 1-5,” said consultancy Mysteel.
Hot metal production, typically used to gauge iron ore demand, increased by 42,300 tons month-on-month to 2.4435 million tons, up 156,300 tons year-on-year, said broker Everbright Futures.
Other steelmaking ingredients on the DCE languished, with coking coal and coke down 2.3% and 1.24%, respectively.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar fell around 1%, hot-rolled coil weakened 1.2%, and stainless steel dipped 0.16%, while wire rod was flat.