Iron ore prices experienced a modest uptick on Friday but ultimately posted a weekly loss due to ongoing concerns about tariffs and steel production cuts in China. The most actively traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) increased by 0.19%, reaching 774 yuan ($106.81) per metric ton.
However, this increase was not enough to offset a weekly decline of 3.49%. Similarly, the benchmark April iron ore on the Singapore Exchange rose 0.04% to $100.4 a ton, marking a 1.99% drop for the week as of 0712 GMT.
Investor sentiment in commodity markets was somewhat bolstered by Beijing’s recent initiatives aimed at stimulating economic growth. Analysts from ANZ noted that China had announced additional fiscal measures to support consumption and enhance domestic demand.
Furthermore, Chinese officials indicated their willingness to implement further stimulus strategies if economic performance falters. The backdrop of these developments includes escalating tensions in Sino-American trade relations, with Washington imposing an extra 10% tariff on Chinese goods, leading to a total tariff of 20%.
Beijing’s retaliatory measures in response have added to market uncertainty. Additionally, steel production cuts within China could result in an increased supply of iron ore, placing further downward pressure on pricing.
In the first two months of 2025, China’s iron ore imports dropped by 8.4% year-on-year, partly influenced by weather-related disruptions in Australia, a key supplier. Other components related to steelmaking showed varied performance on the DCE, with prices for coking coal and coke rising by 1.79% and 1.1%, respectively.
In contrast, most steel benchmarks on the Shanghai Futures Exchange recorded declines, including rebar and hot-rolled coil, while stainless steel made a slight gain of 0.34%.