Iron ore futures climbed to their highest in more than five weeks on Wednesday, driven by moves from the United States and China to cut tariffs following a trade agreement, bolstering hopes for a lasting resolution to the trade dispute.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! closed daytime trade 2.43% higher at 737 yuan ($102.16) a metric ton, its highest close since April 7.
The benchmark June iron ore (SZZFM5) on the Singapore Exchange rose 2.3% to $101.8 a ton as of 0702 GMT, the highest since April 3.
On Tuesday, China said it will lower its tariffs on U.S. imports to 10% for 90 days, starting from 12:01 pm (0401 GMT) on Wednesday.
The U.S. also agreed to cut the “de minimis” tariff for low-value shipments from China to as low as 30%.
U.S. President Donald Trump said in an interview broadcast on Tuesday that he could see himself dealing directly with Chinese President Xi Jinping on the final details of a U.S.-China trade deal.
Meanwhile, Chinese iron ore mining company, Shougang Hierro Peru SHPC1, suspended operations after a part of its dispatch infrastructure collapsed at its shipping port, with repairs likely to take four to five months.
That means the Shougang Group, the miner’s parent company and a major Chinese steelmaker, will have to buy more iron ore cargoes in the spot market to sustain production, said analysts and traders.
Other steelmaking ingredients on the DCE also gained ground, with coking coal NYMEX:ACT1! and coke (DCJcv1) up 2.11% and 1.58%, respectively.
Steel benchmarks on the Shanghai Futures Exchange strengthened. Rebar RBF1! advanced 1.23%, hot-rolled coil EHR1! added 1.27%, wire rod (SWRcv1) ticked 0.58% higher and stainless steel HRC1! gained 1.16%.
Source: Reuters