BEIJING: Iron ore futures extended gains on Wednesday, aided by China’s better-than-expected credit data, but fears of escalating trade tensions ahead of US President-elect Donald Trump taking office next week capped the rise.

Trump has pledged to impose a 60% tariff on Chinese goods.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 0.71% higher at 782.5 yuan ($106.73) a metric ton, after hitting the highest since Jan. 2 at 787.5 yuan a ton earlier in the session.

The benchmark February iron ore on the Singapore Exchange rose 0.31% to $100.65 a ton as of 0331 GMT after touching the highest since Jan. 2 of $101.15 earlier in the day.

Chinese banks extended 990 billion yuan ($135.03 billion) in new loans last month, up from November 2024, outpacing analysts’ forecasts and boosting sentiment in the ferrous market. Prices of the key steelmaking ingredient have gained around 4% so far this week on rising stimulus bets and strong steel trade data.

“The market also remains hopeful of further stimulus measure after recent comments from Vice Finance Minister Liao Min that China has sufficient fiscal firepower to respond to external challenges,” ANZ analysts said.

However, price rise slowed on demand worries amid China’s lingering property woes and slowing economic growth on possible tariff hikes from the US Country Garden, once China’s biggest developer and now facing a liquidation lawsuit, on Tuesday reported steep losses in its long-overdue 2023 and interim 2024 financial results.

China’s economic growth will likely slow to 4.5% in 2025 and cool further to 4.2% in 2026, a Reuters poll showed.

Iron ore hits 7-week lows on rising China stockpile

Other steel making ingredients, including coking coal and coke, on the DCE were little changed.

Steel benchmarks on the Shanghai Futures Exchange advanced. Rebar rose 0.76%, hot-rolled coil climbed 1.03%, wire rod gained 0.2% and stainless steel ticked down 0.08%.