Iron ore futures rebounded on Thursday, as an escalating Sino-U.S. trade war lifted hopes of more aggressive stimulus measures from Beijing to counter the impact of the hefty tariffs.
On Wednesday, top metals consumer China, in response to U.S. President Donald Trump hiking duties on Chinese goods to 104%, hiked the tariffs on U.S. imports to 84% from 34% earlier.
Trump retaliated with an even-higher 125% tariff.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! closed daytime trade 3.06% higher at 707 yuan ($96.30) a metric ton, after falling to its lowest in more than six months on Wednesday.
The benchmark May iron ore (SZZFK5) on the Singapore Exchange added 1.76% to $96.45 a ton as of 0700 GMT. It hit an intraday high of $99.5 in the session.
“The prospect of a prolonged trade war has also raised expectations for Beijing to unveil more aggressive stimulus measures,” ING analysts said.
China needs to implement more proactive macroeconomic policies and roll them out promptly as “external shocks” have pressured China’s economic stabilisation, Premier Li Qiang said.
Other steelmaking ingredients on the DCE were mixed, with coking coal NYMEX:ACT1! easing 0.38% and coke (DCJcv1) gaining 1.91%.
Most steel benchmarks on the Shanghai Futures Exchange advanced. Rebar RBF1! and hot-rolled coil EHR1! climbed 2.01%, wire rod (SWRcv1) rose 3.49%. Stainless steel HRC1! shed 0.28%.
Meanwhile, Trump, in a stunning U-turn, announced a 90-day pause on the hefty duties for trading partners that didn’t retaliate, boosting market sentiment and sending metals soaring.
But China’s steel exports this year might fall below 70 million tons due to the intensifying trade tensions, Chen Kexin, an analyst at consultancy Lange Steel, said, adding that exports won’t tumble in the first half of the year due to front-run shipments.
China’s steel exports hit a nine-year high of 110.72 million tons in 2024.
Source: Reuters
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