SINGAPORE: Iron ore futures prices fell on Friday and were set for modest monthly losses, pressured by US tariff concerns and mounting trade frictions against Chinese steel exports.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) fell 0.43% to 802 yuan ($110.07) a metric ton, as of 0250 GMT. The contract has lost 0.93% for the month.
The benchmark March iron ore on the Singapore Exchange was 0.89% lower at $104.15 a ton, losing 0.59% in February. US President Donald Trump said on Thursday his proposed 25% tariffs on Mexican and Canadian goods will take effect on March 4 along with an extra 10% duty on Chinese imports. Trump imposed a 10% tariff on Chinese imports earlier this month, resulting in a cumulative 20% tariff. Trump also announced plans to impose 25% tariffs on all steel and aluminium imports, which have stirred a new wave of trade frictions against Chinese steel.
Vietnam has announced a temporary anti-dumping levy on some Chinese steel products, while South Korea has provisionally imposed tariffs on Chinese steel imports.
The US steel tariffs are also set to disrupt the Chinese transshipment of steel estimated at $7 billion, undercutting a vital source of sales for China’s struggling steel sector, Reuters reported on Thursday. Meanwhile, shortcomings in China’s trade-in scheme, which could reduce expenses on unsubsidised goods and reduce future spending, are raising pressure on authorities to unveil consumer-focused policies with a longer-term impact when China’s rubber-stamp parliament begins its annual meeting on March 5.
Most steel benchmarks on the Shanghai Futures Exchange fell. Rebar dipped 0.42%, hot-rolled coil lost nearly 0.5%, wire rod declined 0.34% and stainless steel added 0.3%.
Inventories of major steel products fell 2.3% on-week to 5.37 million tons, while domestic steel demand recovered steadily, data from consultancy Mysteel showed. Other steelmaking ingredients on the DCE ticked up, with coking coal and coke up 0.09% and 0.3%, respectively.
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