BEIJING – Iron ore futures flitted sideways on Friday, but were on track for a weekly loss, as escalating trade tensions between the United States and China – the world’s two largest economies – clouded the outlook on demand.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.71 percent higher at 708 yuan ($96.70) a metric ton, registering a weekly loss of 4.8 percent.
The benchmark May iron ore on the Singapore Exchange was down 0.14 percent at $97 a ton, bringing its decline so far this week to 4.8 percent.
US President Donald Trump hiked tariffs on Chinese imports to 125 percent soon after Beijing retaliated with lifting tariffs on American goods to 84 percent from 34 percent earlier.
Fears lingered whether China will respond in kind with even high tariffs.
Trade tensions showed no signs of easing, ANZ analysts said in a note, warning that a worst-case scenario could tip the global economy into a recession.
That has broadly weighed on sentiment in the metals market despite a short relief after Trump, in a stunning U-turn, announced a 90-day pause on the hefty duties for trading partners that didn’t retaliate.
However, resilient near-term demand for iron ore and optimism over potential stimulus measures helped limit loss.
Average daily hot metal output, typically used to gauge iron ore demand, rose for a seventh consecutive week, climbing 0.6 percent from the previous week to a 17-month high of 2.4 million tons as of April 10, a survey from consultancy Mysteel showed.
Other steelmaking ingredients on the DCE lost further ground, with coking coal and coke down 2.72 percent and 1.42 percent, respectively.
