Prices of iron ore futures slipped on Monday as caution over U.S. tariffs and China’s pledge to cut crude steel output this year clouded demand prospects.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) erased earlier gains to end daytime trade 0.71% lower at 769 yuan ($105.92) a metric ton.
The benchmark April iron ore on the Singapore Exchange fell below the key psychological level of $100 to $99.8 a ton as of 0735 GMT.
Prices pared earlier gains as investors, hoping to see more supportive measures from Beijing following the latest disappointing inflation data, calmed.
China’s consumer price index in February missed expectations and fell at the sharpest pace in 13 months while producer price deflation persisted, raising hopes of more stimulus from China to achieve its annual economic growth target this year.
However, the upcoming 25% tariffs on all steel imported into the U.S. clouded demand prospects and weighed on sentiment.
Growing caution that Beijing will announce specific measures in the coming weeks after pledging to continue cutting its crude steel output this year to address overcapacity plaguing the industry also put pressure on iron ore prices.
A reduction in steel output will result in lower consumption for feedstocks including iron ore.
Other steelmaking ingredients on the DCE eased, with coking coal and coke (DCJcv1) down 1.35% and 1.97%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar slipped 1.35%, hot-rolled coil shed 0.89%, wire rod (SWRcv1) lost 1.41% while stainless steel HRC1! added 0.45%.
Source: Reuters
