SINGAPORE: Iron ore futures prices rebounded on Tuesday, as growing demand for the steelmaking ingredient in top consumer China outweighed trade war concerns from upcoming U.S. tariffs.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) closed up 1.86% at 792 yuan ($108.98) a metric ton.
Earlier in the session, prices hit 797 yuan, its highest since March 3.
The benchmark May iron ore on the Singapore Exchange was trading 1.64% higher at $102.65 a ton as of 0706 GMT.
“A further increase in the hot metal output at Chinese steelmakers lent some support to the prices of imported iron ore last week,” said Chinese consultancy Mysteel.
Hot metal production in March continued to increase by 10,200 tons to 2.3728 million tons month-on-month, and the daily consumption of imported ore logged a monthly jump of 13,200 tons, said broker Everbright Futures.
Hot metal output is typically used to gauge iron ore demand.
“Whether the strength in ore prices could be maintained is subject to the sustainability of downstream demand recovery,” Mysteel added.
Broadly, China’s factory activity expanded at its fastest pace in four months in March, buoyed by stronger demand and robust export orders, a private-sector survey showed on Tuesday.
Despite this, average resale home prices across 100 Chinese cities fell at a sharper month-on-month pace in March, a private survey showed on Tuesday, signalling persistent challenges in the property sector.
Moreover, U.S. President Donald Trump is set to announce a massive tariff plan targeting all countries on Wednesday, with increased tariffs on all goods from China.
Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 0.65% and 3.75%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange strengthened. Hot-rolled coil edged up 0.24%, wire rod was up 0.12%, stainless steel gained around 0.8%, while rebar ticked down nearly 0.1%.
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