Iron ore futures experienced a decline for the third consecutive session on Tuesday, driven by rising trade tensions between the United States and China. These tensions overshadowed the seasonal demand for iron ore, which typically increases during the peak construction period in April. The most actively traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) fell by 3.15%, closing at 738.5 yuan ($100.73) per metric ton.
At one point during the day, prices dropped to 735.5 yuan, marking the lowest level since November 19, 2024. Meanwhile, the benchmark May iron ore on the Singapore Exchange also experienced a decline, slipping 3.14% to $94.55 per ton. Atilla Widnell, managing director at Navigate Commodities, pointed out that the downturn in iron ore futures was a predictable reaction to the ongoing trade disputes between the world’s leading economies.
In response to U.S. President Donald Trump’s threats of imposing an additional 50% tariff on Chinese imports, Beijing has vowed to “fight to the end,” maintaining its current 34% tariff on U.S. goods. The prospect of higher U.S. tariffs could negatively impact steel demand within the manufacturing sector, leading to a bleak outlook for global demand, according to broker Hexun Futures. In contrast, data from Chinese consultancy Mysteel revealed that the total output of iron ore concentrates among domestic mining companies reached a nine-month high.
Other steelmaking materials on the DCE also saw significant losses, with coking coal and coke decreasing by 4.68% and 4.08%, respectively. Various steel benchmarks on the Shanghai Futures Exchange suffered losses as well, including rebar, which fell nearly 1.3%, and hot-rolled coil, which weakened by 1.9%. Widnell noted that the latest escalation in trade measures initiated by the U.S. raises the likelihood of additional stimulus measures from China.