Iron ore futures erased early gains to trade lower on Tuesday as unrest from U.S. President Donald Trump’s new tariffs outweighed concerns over weather-related supply disruptions in major supplier Australia.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) finished daytime trade 1.1% lower at 812 yuan ($111.12) a metric ton, the lowest since February 6.
It touched the highest since December 10, 2024 at 830.5 yuan a ton earlier in the session.
The benchmark March iron ore (SZZFH5) on the Singapore Exchange fell 1.32% to $105.75 a ton, as of 0708 GMT, after hitting the highest since October 16, 2024 at $107.65 a ton earlier.
Trump substantially raised tariffs on steel and aluminum imports on Monday to a flat 25% “without exceptions or exemptions” in a move to aid the struggling industries but which increases the risk of a multi-front trade war.
The tariffs will apply to millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the U.S. duty free under the carve-outs.
“The tariffs could weaken demand for iron ore, if China’s export markets for steel are impacted,” ANZ analysts said in a note.
Prices posted gains earlier on potential supply disruptions.
The operator of Australia’s iron ore export hub Port Hedland, used by major producers BHP Group BHP, Fortescue FMG and billionaire Gina Rinehart’s Hancock Prospecting, had started clearing vessels from the port after a weather warning from the Bureau of Meteorology.
This came after top supplier Rio Tinto RIO, RIO cleared ships from two Western Australian ports last week, contributing to a sharp fall in shipments during the period, said traders.
Other steelmaking ingredients on the DCE slid, with coking coal NYMEX:ACT1! and coke (DCJcv1) down 1.84% and 1.51%, respectively.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar RBF1! slid 1.95%, hot-rolled coil EHR1! lost 1.45%, wire rod (SWRcv1) declined 1.41% and stainless steel HRC1! dropped 1.05%.
Source: Reuters
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