Iron ore futures headed for a weekly loss, with concerns surrounding the demand outlook due to U.S.-China trade tensions coinciding with prospects of rising ore supply for the remainder of the year.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! closed daytime trade 0.19% lower at 771 yuan ($108.19) a metric ton, pushing the weekly loss to 3.1%.
The benchmark November iron ore on the Singapore Exchange was 0.65% lower at $104.25 a ton, as of 0755 GMT. It recorded a decline of 2% so far this week.
Prices of the key steelmaking ingredient found some support from firm demand in top consumer China, which helped limit further downside on Friday.
The average daily hot metal output stood at 2.41 million tons in the week till October 16, a level that dictates steady ore demand despite a slight drop of 0.2% week-on-week, data from consultancy Mysteel showed.
The return of trade friction between the United States and China rekindled worries about whether the world’s top metals consumer could achieve its economic growth target of around 5%.
U.S. President Donald Trump threatened to terminate some trade ties with China and to slap an additional 100% tariffs on imports from the second-largest economy after Beijing last week expanded export restrictions on rare earths that are vital for electric vehicles and defense sectors.
Expectations of more supply in the fourth quarter added to pressure on ore prices.
The world’s largest iron ore supplier Rio Tinto RIO, RIO said on Tuesday it needs a strong year-end finish to meet its iron ore shipment target.
Other steelmaking ingredients like coking coal NYMEX:ACT1! and coke (DCJcv1) gained 1.46% and 1.64%, respectively, on facing supply constraints due to safety checks, analysts said.
Steel benchmarks on the Shanghai Futures Exchange moved sideways. Rebar RBF1! was little changed, hot-rolled coil EHR1! dipped 0.16%, wire rod (SWRcv1) advanced 0.72% and stainless steel HRC1! climbed 0.68%.
Source: Reuters
