Iron ore futures experienced a decline for the second consecutive session on Friday, signaling a potential weekly loss. This downturn is largely attributed to U.S. President Donald Trump’s recent announcement of a 50% tariff on a variety of steel derivative products. Specifically, the September iron ore contract on China’s Dalian Commodity Exchange (DCE) closed down 0.14% at 703 yuan (approximately $97.90) per metric ton, reflecting a weekly drop of 0.7%. On the Singapore Exchange, the benchmark July iron ore price fell by 0.15% to $94.4 per ton as of 0723 GMT, marking a decline of 1.2% for the week.
This contract has remained below the critical threshold of $100 for nearly a month, reaching a session low of $93.65, the lowest since April 10. The new tariffs will affect imported household appliances, such as dishwashers and refrigerators, starting June 23. Despite these developments, some analysts believe that the impact on China’s steel market is likely to be minimal in the short term. They suggest that while the sentiment around these tariffs is negative, it will take time for any real effects to emerge.
Demand for iron ore, which is a crucial component in steelmaking, remains robust and helps mitigate some of the losses. Recent data from consultancy Mysteel shows that average daily hot metal output, an indicator of iron ore demand, remained at approximately 2.42 million tons for the week ending June 12. It is also anticipated that China’s steel exports may rise by 1.2% this year to 112 million tons, although apparent steel consumption could decrease by 1% compared to the previous year, according to analysts from China International Capital Corporation. In contrast, prices for other steelmaking materials on the DCE saw slight increases, including a 0.06% rise in coking coal and a 0.75% rise in coke.
However, steel benchmarks on the Shanghai Futures Exchange weakened, with rebar, hot-rolled coil, and stainless steel prices all showing declines.