Iron Ore Futures Rise Amid Trade Tensions

SINGAPORE: Iron ore futures experienced a recovery on Monday, bolstered by short-term demand for ore and a weaker U.S. dollar. However, ongoing trade frictions between the United States and China, the largest consumer, moderated the gains.

The most actively traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) saw a rise of 0.78%, reaching 712 yuan ($97.70) per metric ton as of 0244 GMT. Simultaneously, the May iron ore benchmark on the Singapore Exchange increased by 1.23% to $98.7 per ton.

According to Hexun Futures, hot metal production remains robust, indicating strong demand, while terminal demand shows resilience. Hot metal output serves as a key indicator of iron ore demand.

Mysteel, a consultancy, noted that production among China’s independent electric-arc-furnace (EAF) steelmakers has been on the rise for ten consecutive weeks.

The weakening U.S. dollar also contributed to the price support, hitting a three-year low of 98.623 against a basket of currencies on Monday. A weaker dollar tends to make dollar-denominated commodities more affordable for holders of other currencies.

Impact of Trade War

Despite signals of potential easing in tariff policies, concerns about tariffs continue to weigh on the outlook for Chinese steel exports in the medium term, according to Galaxy Futures.

Other steelmaking components on the DCE also saw gains, with coking coal rising by 0.95% and coke by 0.42%.

Steel benchmarks on the Shanghai Futures Exchange showed mixed performance. Rebar increased by approximately 0.5%, and hot-rolled coil also rose by 0.56%, while wire rod edged down by 0.27%, and stainless steel decreased slightly by 0.47%.