SINGAPORE: Iron ore futures prices traded within a tight range on Tuesday, as investors weighed fresh temporary tariffs on some Chinese steel against brightening near-term demand from China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) rose 0.21% to 711 yuan ($97.26) a metric ton.
The benchmark May iron ore on the Singapore Exchange was 0.87% lower at $98.5 a ton as of 0705 GMT.
Tariff concerns are weighing on steel exports, affecting the demand outlook for iron ore in the second quarter, said broker Galaxy Futures.
On Monday, India imposed a 12% temporary tariff on some steel imports, locally known as safeguard duty, to curb a surge in cheap shipments primarily from China.
Beijing has also accused Washington of abusing tariffs and warned countries against striking a broader economic deal with the US at its expense.
Meanwhile, steel production grew 4.6% to 93 million tonnes in March despite government efforts to curb capacity, according to ANZ.
“Strong iron ore buying by steel mills and lower imports saw inventories decline sharply,” added ANZ.
Total iron ore stockpiles across ports in China fell 2.39% week-on-week to 134.6 million tons as of April 18, Steelhome data showed.
Still, hot metal output decreased slightly by 1,000 tons month-on-month, and steel mill profits have declined, said broker Everbright Futures.
Hot metal output is typically used to gauge iron ore demand.
On the supply side, volumes of iron ore shipments from Australia and Brazil nudged up 0.1% from the previous week, said consultancy Mysteel in a note.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 2.42% and 1.83%, respectively.
Steel benchmarks on the Shanghai Futures Exchange weakened. Rebar dipped 0.74%, hot-rolled coil and wire rod both lost around 0.8%, and stainless steel was down 0.63%.
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