Iron ore futures fell on Wednesday, as investors fretted over trade tensions between the U.S. and top consumer China, although shipping snags in Western Australia cushioned the decline.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.99% lower at 801 yuan ($110.00) a metric ton.
China’s markets were closed from Jan. 28 to Feb. 4 for the Lunar New Year holidays.
The benchmark March iron ore (SZZFH5) on the Singapore Exchange declined 1.09% to $103.9 a ton by 0709 GMT.
“Sentiment is likely to suffer as Chinese markets reopen and react to the barrage of tariffs on commodities,” ANZ analysts said in a note.
U.S. President Donald Trump’s additional 10% tariff on all Chinese imports kicked in on Tuesday.
China responded with tariffs on U.S. imports in a rapid response to the new U.S. duties, renewing a trade war between the world’s top two economies. The measures include a 15% levy on U.S. coal, a key steelmaking ingredient.
Meanwhile, China’s services activity expanded at a slower pace in January, though business sentiment improved, a private sector business survey showed.
The country’s factory activity growth slowed, a separate survey showed.
On the supply side, Rio Tinto said on Tuesday it had begun clearing iron ore ships from two Western Australian ports as two tropical cyclones offshore complicated its efforts to repair infrastructure damaged by a cyclone last month.
In January, Rio warned that its first-quarter shipments could be affected by disruptions to rail operations following record rainfall.
Other steelmaking ingredients on the DCE slumped, with coking coal NYMEX:ACT1! and coke (DCJcv1) losing 3.17% and 3.58%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange fell. Rebar RBF1! slid 1.51%, hot-rolled coil EHR1! declined 1.64%, wire rod (SWRcv1) shed 1.09%, while stainless steel HRC1! gained nearly 1%.
Source: Reuters
