SINGAPORE: Dalian iron ore futures edged higher on Friday and were set for a small weekly gain, aided by falling portside inventories in China, even as investors fretted over mounting trade tensions between the United States and China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.25% higher at 803 yuan ($110.73) a metric ton, as of 0320 GMT, gaining 0.38% so far this week.
The benchmark February iron ore on the Singapore Exchange was 0.71% higher at $104.45 a ton.
The contract has lost 0.14% so far this week. In top consumer China, overseas shipments and port arrivals have decreased, and port inventories have fallen, Chinese consultancy Hexun Futures said in a note.
Total portside ore stockpiles dipped 0.17% from the previous week to 145.65 million tons, as of Jan. 24, according to Steelhome data.
On the demand-side, hot metal output has rebounded, Hexun Futures said.
Hot metal output, a blast furnace product, is typically used to gauge iron ore demand.
Also providing some support to prices was a weaker U.S dollar, which was headed for its biggest weekly fall in two months.
A weaker dollar makes dollar-denominated commodities cheaper for holders of other currencies.
On Thursday, Washington introduced a bill that would revoke China’s preferential trade status with the US, phase in steep tariffs and end the “de minimis” exemption for low-value Chinese imports.
US President Donald Trump has also vowed more duties against Chinese imports. Meanwhile, Trump said his conversation with Chinese President Xi Jinping was “friendly” and thought he could reach a trade deal with China.
Other steelmaking ingredients on the DCE declined, with coking coal and coke down 1.79% and 2.33%, respectively.
Steel benchmarks on the Shanghai Futures Exchange weakened as well.
Rebar and hot-rolled coil both lost around 0.6%, wire rod shed 0.45% and stainless steel dropped 0.34%.