Dalian iron ore futures edged higher on Tuesday, supported by near-term demand in top consumer China, although gains were limited by conflicting statements from Washington and Beijing over trade negotiations.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.28% higher at 709 yuan ($97.49) a metric ton.
The benchmark May iron ore on the Singapore Exchange dipped 0.11% to $98.3 a ton, as of 0701 GMT.
Prices for imported iron ore at China’s ports gained some ground on April 28, as downstream replenishing demand persists ahead of the five-day Labour Day holiday, said consultancy Mysteel.
Hot metal production, typically used to gauge iron ore demand, increased by 42,300 tons month-on-month to 2.4435 million tons, up 156,300 tons year-on-year, said broker Everbright Futures.
Still, there is pressure on the Chinese market to reduce iron ore inventories amid the uncertainty that the trade war with the U.S. presents, said ANZ.
U.S. President Donald Trump insisted there has been progress with China, and that he has spoken with President Xi Jinping. Beijing has denied trade talks are occurring.
Moreover, China’s factory activity likely contracted in April, a Reuters poll showed on Tuesday, as Trump’s “Liberation Day” package of tariffs brought a sudden halt to two months of recovery.
On the supply side, Australian miner Fortescue FMG posted higher third-quarter iron ore shipments.
The total volume of iron ore dispatched from Australia and Brazil increased by 13.2% on-week to reach 27.6 million tons, Mysteel said in a separate note.
Other steelmaking ingredients on the DCE languished, with coking coal NYMEX:ACT1! and coke (DCJcv1) down 2.36% and 1.02%, respectively.
Steel benchmarks on the Shanghai Futures Exchange traded sideways. Rebar RBF1! fell around 1.2% and hot-rolled coil EHR1! weakened 1.26%, while stainless steel HRC1! inched 0.16% higher and wire rod (SWRcv1) gained 0.4%.
Source: Reuters
