SINGAPORE: Iron ore futures prices pared losses on Monday, with prices supported by near-term ore demand and a weakening dollar, though ongoing trade tensions between the US and top consumer China limited gains.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.78% higher at 712 yuan ($97.70) a metric ton as of 0244 GMT.
The benchmark May iron ore on the Singapore Exchange was 1.23% higher at $98.7 a ton.
On the demand-side, hot metal production is at a high level and terminal demand is resilient, said broker Hexun Futures in a note.
Hot metal output is typically used to gauge demand for iron ore.
“Production among China’s independent electric-arc-furnace (EAF) steelmakers has now risen for 10 weeks straight,” said consultancy Mysteel in a note.
Also providing some support to prices was a weaker US dollar, which slid to a three-year low of 98.623 against a basket of currencies on Monday.
Iron ore set for 2nd weekly loss
A weaker dollar makes dollar-denominated commodities cheaper for holders of other currencies. Last week, US President Donald Trump signaled a potential end to tit-for-tat tariffs between the US and China, expressing optimism that the two countries could reach a deal.
China’s ambassador to the United States, Xie Feng, urged Washington on Saturday to seek common ground with Beijing, while warning that China stood ready to retaliate in the escalating trade war.
While there are signs of easing in tariff policies, tariff concerns are weighing on the outlook for Chinese steel exports in the medium-term, said broker Galaxy Futures in a note.
Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 0.95% and 0.42%, respectively.
Steel benchmarks on the Shanghai Futures Exchange traded sideways.
Rebar gained around 0.5% and hot-rolled coil was up 0.56%, while wire rod edged 0.27% lower and stainless steel ticked down 0.47%.
Comments