Iron ore futures prices saw a decline on Tuesday, pressured by a recovery in iron ore shipments and increasing trade barriers on Chinese steel exports.
As of 0246 GMT, the most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) dropped by 1.14%, trading at 821.5 yuan ($113.27) per metric ton. Meanwhile, the benchmark March iron ore contract on the Singapore Exchange fell 1.49%, settling at $106.75 per ton.
The weakening of iron ore prices came amidst rising concerns over the global steel market. A bipartisan group of U.S. lawmakers is introducing new legislation to address the impact of Chinese-backed companies relocating production to avoid American duties. The proposed bill aims to strengthen anti-dumping measures in response to China’s role in global steel overcapacity.
Although China exports a small quantity of steel to the U.S., the country remains a key player in global steel production. The U.S. has voiced concerns over China’s substantial contribution to the excess steel capacity that affects international markets.
In addition, Vietnam has announced it will impose a temporary anti-dumping levy on certain steel products from China. This move follows the U.S.’s imposition of a 25% tariff on all steel imports earlier this month, and South Korea’s provisional tariffs on Chinese steel imports introduced last week.
Analysts at ANZ noted that iron ore prices also came under pressure as data revealed a rebound in supply. According to Chinese consultancy Mysteel, iron ore shipments from Australia and Brazil reached 25.8 million tons by February 23, reversing a two-week slump and doubling the volume from the previous week.
In addition to iron ore, other steelmaking materials on the DCE also experienced losses, with coking coal and coke falling by 1.89% and 1.9%, respectively. Steel futures on the Shanghai Futures Exchange saw declines as well, with rebar dropping by 1.29%, hot-rolled coil and wire rod each weakening by around 1%, and stainless steel slipping 0.11%.
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