SINGAPORE: Iron ore futures prices declined on Wednesday, weighed down by concerns that US President Donald Trump could yet impose higher tariffs on Chinese imports.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 0.93% lower at 796.5 yuan ($109.45) a metric ton.
The benchmark February iron ore on the Singapore Exchange was 0.95% lower at $103.75 a ton. Trump did not immediately impose tariffs upon inauguration and that, according to Chinese consultancy Galaxy Futures, supported prices on Tuesday.
However, later that day, Trump said his administration was discussing a 10% punitive duty on Chinese imports, underscoring his longstanding desire for broader duties.
This uncertainty about future tariff policies is causing the market to retract, Galaxy Futures said. China and Hong Kong stocks also weakened after Trump’s fresh tariff threats. Leading declines onshore, the real estate sector tumbled 2.4% to pare gains from the previous day.
Amid the potential US tariff hikes, Chinese policymakers are intensifying efforts to stimulate a faltering economy that is grappling with a prolonged property crisis, high local government debt and weak consumer demand.
Still, a more conservative and considered approach by Trump implies Chinese authorities may scale back support packages, said Atilla Widnell, managing director at Navigate Commodities. Other steelmaking ingredients on the DCE declined, with coking coal and coke down 1.13% and 1.1%, respectively.
Steel benchmarks on the Shanghai Futures Exchange traded mixed. Rebar shed nearly 1% and hot-rolled coil declined 1.04%, while wire rod and stainless steel gained 0.28% and 0.46% respectively.
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