**Market Update: Iron Ore Futures Decline Amid Tariff Pressures and Strong Chinese Demand**
**By Michele Pek**
SINGAPORE (Reuters) – Iron ore futures experienced a decline on Thursday, influenced by the introduction of new tariff measures targeting Chinese steel exports. However, robust demand from China, the world’s largest consumer of steel, provided some support against further losses.
The most-active May iron ore contract on the Dalian Commodity Exchange (DCE) closed the daytime session down by 0.8%, settling at 805 yuan ($110.77) per metric ton. Meanwhile, the benchmark March iron ore on the Singapore Exchange fell by 0.93%, trading at $104.90 per ton.
The outlook for Chinese steel exports remains uncertain due to increasing tariffs from various countries. Following U.S. President Donald Trump’s recent decision to impose a 25% tariff on all steel products, Vietnam has introduced a temporary anti-dumping tariff on Chinese steel, while South Korea is reportedly planning to levy tariffs of up to 38% on imports of Chinese steel plates. The European Union is also contemplating potential restrictions on steel imports in light of these tariff threats.
Despite these challenges, the daily crude steel output from member mills of the China Iron and Steel Association (CISA) touched a seven-month peak in mid-February, producing 2.15 million tons, according to consultancy Mysteel. Furthermore, inventories of imported iron ore sintering fines saw a 3.8% week-on-week decline, indicating increased consumption of this key steel feedstock.
In related market movements, steel benchmarks on the Shanghai Futures Exchange showed optimism, with rebar prices rising nearly 0.5%, hot-rolled coil up by 0.35%, wire rod gaining 0.54%, and stainless steel climbing 0.69%. Other essential steelmaking materials on the DCE also posted gains, with coking coal and coke increasing by 0.87% and 0.75%, respectively.
**For Forex Traders:**
Traders focusing on commodities, especially iron ore and related steel products, should be vigilant of the ongoing geopolitical developments. The increasing tariffs could lead to volatility in the Chinese economy, affecting not just steel prices but also influencing currency pairs involving the Chinese yuan (CNY) and other major currencies. Monitoring steel production figures and fluctuations in inventory levels can provide critical insights into market trends. Given the complexities in global trade relationships, it’s advisable for forex traders to stay updated on related news for potential trading opportunities.
($1 = 7.2675 Chinese yuan)
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