SINGAPORE: Iron ore futures fell for a third straight session on Tuesday as escalating trade tensions between the US and top consumer China countered support from seasonal demand for the steelmaking ingredient during the peak construction period in April.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) plunged 3.15% to finish at 738.5 yuan ($100.73) a metric ton. Earlier in the session, prices hit 735.5 yuan, the lowest since November 19, 2024. The benchmark May iron ore on the Singapore Exchange fell 3.14% to $94.55 a ton as of 0704 GMT. “Iron ore futures have unsurprisingly responded to… tit-for-tat trade measures between the world’s two largest superpowers,” said Atilla Widnell, managing director at Navigate Commodities.
Beijing vowed to “fight to the end”, rejecting calls to withdraw its 34% tariff on US imports after US President Donald Trump threatened an additional 50% duty on Chinese imports.
The new levy, if imposed, could take the total US duties on Chinese goods to 104%. The higher-than-expected US tariffs may affect the demand for steel in the manufacturing industry, while the broad outlook for global demand has plummeted, said broker Hexun Futures. However, the total output of iron ore concentrates among domestic mining enterprises touched a nine-month high, according to weekly data from Chinese consultancy Mysteel.
Other steelmaking ingredients on the DCE sank, with coking coal and coke down 4.68% and 4.08%, respectively. Most steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar fell nearly 1.3%, hot-rolled coil weakened 1.9%, stainless steel dropped 1.2% and wire rod traded flat. The latest escalation in the US-initiated trade measures significantly increases the probability of China unleashing further stimulus, Widnell added.
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