Iron ore futures experienced a significant decline on Wednesday, reaching their lowest levels in over six months. This drop is largely attributed to the intensified global trade war following U.S. President Donald Trump’s imposition of broad tariffs. Specifically, the September iron ore contract on China’s Dalian Commodity Exchange (DCE) closed down 2.68%, settling at 689 yuan ($93.74) per metric ton. Earlier in the day, the contract plummeted to a low of 670.5 yuan.
Meanwhile, the benchmark May iron ore on the Singapore Exchange also saw a decline, trading 1.16% lower at $93.65 as of 0712 GMT. It had previously reached a low of $91.70 per ton, marking its lowest level since September. Both benchmarks managed to recover some losses after news emerged that China’s top leaders are planning to convene a meeting to discuss measures aimed at boosting the economy and stabilizing capital markets. The U.S. recently announced that it would impose 104% duties on imports from China shortly after midnight, further escalating tensions.
This decision came after China refused to concede to what it termed as blackmail, affirming its determination to “fight till the end.” Analysts from First Futures noted that the impact of the increasing tariffs has exacerbated market pressures, placing additional downward pressure on iron ore prices. Other steelmaking materials also faced declines on the DCE, with coking coal and coke falling by 4.03% and 3.24%, respectively. Steel prices on the Shanghai Futures Exchange declined in tandem, reflecting the broader market sentiment.
Concerns regarding future demand, particularly due to expected decreases in domestic steel consumption and disruptions in construction activities caused by the summer heat, have further affected ferrous market prices.