Iron Ore Prices Drop After Four-Day Rally Amid Rising Tariffs on Chinese Steel
The iron ore market faced a setback on Monday as rising tariffs on Chinese steel dampened demand prospects, ending a four-day winning streak. Despite this decline, lower portside inventories in China helped limit the losses, keeping investor sentiment from falling sharply. 📉
Iron Ore Price Movements
- The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) dropped 0.77% to 832.5 yuan ($114.95) per metric ton.
- The benchmark March iron ore contract on the Singapore Exchange (SGX) fell 0.18% to $108.3 per ton as of 07:10 GMT.
Why Are Iron Ore Prices Falling?
1. Rising Global Tariffs on Chinese Steel
📦 A key factor driving the price drop is the increase in anti-dumping measures against Chinese steel exports:
- Vietnam imposed a temporary anti-dumping duty of up to 27.83% on certain steel products from China.
- The U.S. recently introduced a 25% tariff on all steel imports, intensifying trade tensions.
- South Korea followed suit, provisionally imposing tariffs on Chinese steel plates last week.
2. Trade Tensions Affecting Market Sentiment
Markets remain cautious as China’s stock market fell on Monday, partly due to concerns over U.S. President Donald Trump’s new memorandum, which restricts Chinese investments in strategic industries. This move has escalated trade tensions, leading to uncertainty in the global commodities market.
3. Declining Blast Furnace Utilization in China
China’s blast furnace steel mill utilization rate declined for the second consecutive week, signaling weaker iron ore demand. According to Mysteel data, daily hot metal production fell 0.21% week-on-week to 2.28 million metric tons as of February 20. Hot metal output is a common metric for gauging iron ore consumption.
Why Iron Ore Losses Were Limited
Despite the negative factors, falling port inventories in China helped prevent a larger price drop:
- Portside iron ore inventories in China fell 1.15% to 145.8 million metric tons as of February 21, according to SteelHome data.
- Global iron ore shipments also declined slightly year-on-year due to weather disruptions in Australia, according to Hexun Futures.
Impact on Other Steelmaking Materials
Other steel-related commodities on the Dalian Commodity Exchange (DCE) also saw losses:
- 🔥 Coking coal dropped 1.99%.
- 🔥 Coke prices declined 2.89%.
- 🧱 Steel futures on the Shanghai Futures Exchange fell:
- Rebar down 0.8%
- Hot-rolled coil down 1.24%
- Stainless steel and wire rod down 0.23%
Market Outlook: What’s Next?
- 📉 Iron ore prices remain under pressure due to weaker steel demand and global trade policies.
- 📦 Short-term support could come from lower inventories, but global sentiment remains uncertain.
- 🔍 Investors are closely monitoring China’s economic recovery and possible policy interventions to stabilize steel demand.
With ongoing trade tensions and fluctuating demand, the iron ore market is likely to experience continued volatility in the coming weeks. đź“Š
Ayzalme
Just a calm man, enthusiast for investing and technology.
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