BEIJING — Prices of iron ore futures touched a more than two-week high on Tuesday, supported by a US-China temporary trade agreement, although caution over a final deal and potentially slower near-term demand limited gains.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.56 percent higher at 718 yuan ($99.82) a metric ton.
The contract hit its highest since April 24 at 727 yuan earlier in the session.
The benchmark June iron ore on the Singapore Exchange, however, dipped 0.45 percent to $99.55 a ton, after touching its highest since April 24 at $100.35.
The US and China agreed on Monday that the United States would drop levies on Chinese imports from 145 percent to 30 percent during a 90-day negotiation period and China would cut duties from 125 percent to 10 percent. This boosted investor sentiment and led to a broad price rally across commodities.
But the initial enthusiasm faded amid uncertainties that the countries would reach a final deal and on seasonally slow demand, prompting concerns that ore demand may be sluggish in the coming weeks.
It’s expected that hot metal output will likely show signs of softening in mid-to-late May, analysts at Shengda Futures said in a note.
