Iron ore ticks higher on firmer China demand; tariff concerns cap rise
Iron ore futures prices edged up on Monday as rising crude steel production in top consumer China bolstered sentiment for the steelmaking material, though U.S. steel tariff concerns capped gains.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) traded 0.28 per cent higher at 705 yuan ($98.13) a metric ton, as of 0253 GMT.
The benchmark July iron ore on the Singapore Exchange rose 0.25 per cent to $94.4 a ton. China's crude steel output in May gained 0.6 per cent from April as mills boosted their operating rates to take advantage of healthy profit margins spurred by exports. Around 60 per cent of blast-furnace steel mills in China reported positive margins as of June 12, data from consultancy Mysteel showed. Still, average daily hot metal output, typically used as a gauge of iron ore demand, dipped around 0.1 per cent week-on-week to 2.416 million tons as of June 13, according to Mysteel data. On the trade front, a range of imported household appliances, including dishwashers, washing machines, refrigerators and more will be subject to Trump's 50 per cent steel tariffs from June 23. Broadly, China's new home prices declined 0.2 per cent in May from the previous month, official data showed on Monday, a sign that the country's property sector remains stagnant despite several rounds of policy support measures. Also pressuring prices was a stronger U.S. dollar, driven by safe-haven buying amid intensifying geopolitical tensions in the Middle East. A firmer dollar makes dollar-denominated assets less affordable to holders of other currencies. Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.81 per cent and 1.04 per cent , respectively. Steel benchmarks on the Shanghai Futures Exchange strengthened. Rebar rose 0.81 per cent , hot-rolled coil was up 0.88 per cent , wire rod edged 0.3 per cent higher and stainless steel inched up 0.04 per cent . ($1 = 7.1843 Chinese yuan) (Reporting by Michele Pek; Editing by Rashmi Aich)
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