Iron ore futures fell to their lowest in nearly two months on Tuesday due to demand fears sparked by President Donald Trump’s plan to double tariffs on steel imports and on weak factory data in top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.14% lower at 695.5 yuan ($96.69) a metric ton.
The contract hit its lowest since April 10 at 690.5 yuan a ton earlier in the session.
The benchmark July iron ore on the Singapore Exchange eased 1.13% to $94.15 a ton as of 0700 GMT, after touching its lowest since April 10 at $93.8 earlier.
On Friday, Trump unveiled his plan to double tariffs on imported steel and aluminum to 50%, ratcheting up pressure on global steel producers and heightening global trade tensions.
US prices of steel and aluminum spiked on Monday, while shares of foreign steelmakers slumped.
Chinese markets were closed on Monday due to a public holiday.
Despite a 90-day pause, the ongoing tariff war between the world’s two largest economies has impacted the Chinese manufacturing sector, casting a shadow on steel’s demand outlook.
The sector is now the country’s biggest steel consumer, outpacing infrastructure and real estate.
China’s manufacturing activity shrank for the first time in eight months in May, a private-sector survey showed on Tuesday, after official data reported a contraction for a second month.
Other steelmaking ingredients on the DCE also weakened, with coking coal and coke falling 3.03% and 1.1%, respectively, to near nine-year lows.
($1 = 7.1932 Chinese yuan)
(Reporting by Amy Lv and Lewis Jackson; Editing by Sumana Nandy and Sonia Cheema)
