Iron ore futures declined on Wednesday, weighed down by concerns that U.S. President Donald Trump could impose higher tariffs on Chinese imports.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! ended daytime trade 0.44% lower at 800.5 yuan ($109.94) a metric ton, ending a nine-session rally.
The benchmark February iron ore (SZZFG5) on the Singapore Exchange fell 1.1% to $103.6 a ton by 0726 GMT.
Trump did not immediately impose tariffs upon his inauguration, which supported prices on Tuesday, said Chinese consultancy Galaxy Futures.
However, Trump later said his administration was discussing a 10% punitive duty on Chinese imports, underscoring his longstanding desire for broader duties.
The uncertainty about tariff policies is causing the market to retract, Galaxy Futures said.
Amid the potential tariff hikes, Chinese policymakers are intensifying efforts to stimulate a faltering economy that is already grappling with a prolonged property crisis, high local government debt and weak consumer demand.
A more conservative and considered approach by Trump implies Chinese authorities may scale back support packages, said Atilla Widnell, managing director at Navigate Commodities.
Chinese and Hong Kong stocks also weakened after Trump’s tariff threats, with the real estate sector, 000952 leading declines onshore with a 3.4% drop.
Still, there is rekindled enthusiasm among homebuyers due to the government’s recent targeted policy support, said Chinese consultancy Lange Steel, citing Kang Yi, head of the National Bureau of Statistics.
Other steelmaking ingredients on the DCE declined, with coking coal and coke (DCJcv1) down 0.82% and 0.37%, respectively.
Steel benchmarks on the Shanghai Futures Exchange traded mixed. Rebar RBF1! shed nearly 0.8% and hot-rolled coil EHR1! declined 0.72%, while wire rod (SWRcv1) and stainless steel HRC1! gained 0.56% and 0.53% respectively.
Source: Reuters
