Iron ore price dips on China blast furnace cuts, US trade restrictions

me-metals: Iron ore futures prices declined on Wednesday, pressured by a mandated production cut ahead of a military parade in China and US trade restrictions on steel imports.

According to me-metals cited from mining.com, The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.19% lower at 769 yuan ($107.09) a metric ton.

The benchmark September iron ore on the Singapore Exchange was 0.25% lower at $100.8 a ton, as of 0710 GMT.

Ahead of the military parade in Beijing on September 3 commemorating the end of World War Two, China has mandated blast furnace production cuts aimed at improving air quality, a move that is weighing on raw material prices, broker Galaxy Futures said in a note on Wednesday.

Still, the planned cuts are less severe than earlier market rumours of a full shutdown, limiting the impact on actual demand, ANZ analysts said in a note on Wednesday.

Meanwhile, the US said on Tuesday that it was targeting more imports of Chinese goods, including steel, copper, and lithium, for high-priority enforcement over alleged human rights abuses involving the Uyghurs.

At the same time, the US announced that it was widening the 50% tariff on steel and aluminum to more than 400 products to support American industries.

Appeals from companies like Tesla, which argued that available US steel production capacity was not sufficient for its electric vehicles, were unsuccessful.

On the supply front, iron ore shipments from top producers Australia and Brazil rebounded week-on-week, with Brazilian mining giant Vale leading the charge, according to data from Chinese consultancy Mysteel.

Other steelmaking ingredients on the DCE fell, with coking coal and coke down 2.6% and 2.33%, respectively.

Steel benchmarks on the Shanghai Futures Exchange mostly lost ground. Rebar fell 0.38%, hot-rolled coil decreased 0.61%, and stainless steel dipped 0.81%, while wire rod gained 0.15%.

($1 = 7.1807 Chinese yuan)

source: mining.com