Iron ore futures in Singapore saw an increase on Tuesday, fueled by optimism surrounding a potential rise in demand from China. Steelmakers in northern China are anticipated to resume production following the conclusion of their annual parliamentary sessions, known as the “Two Sessions.” Despite this positive outlook, the gains were somewhat restrained due to rising concerns over escalating trade tensions and the latest tariffs imposed by U.S. President Donald Trump. The benchmark April iron ore contract on the Singapore Exchange rose by 0.86%, reaching $100.75 per metric ton at 0700 GMT, after initially hitting a session low of $98.85, the lowest since January 14. Meanwhile, the most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) wrapped up the daytime trading at 774.5 yuan ($106.95) per ton, showing little change.
Analysts from Chaos Ternary Futures noted that hot metal output still has the potential for growth in March, as some steelmakers in North China are likely to increase their production following the conclusion of the Two Sessions, which began on March 4 and concluded later that day. The output of hot metal is a critical indicator of iron ore demand in the market. On Monday, iron ore prices had experienced a decline due to a lack of positive macroeconomic sentiment; fading hopes for further stimulus measures in China compounded concerns about the impact of new tariffs on demand. Additionally, other steelmaking materials on the DCE retreated, including coking coal and coke, which dropped by 1.67% and 1.28%, respectively.
Overall, steel benchmarks on the Shanghai Futures Exchange were also generally weaker, signaling fluctuating market conditions.