Iron ore futures climbed to their highest levels in more than five weeks on Wednesday, fueled by fresh optimism over a US-China trade agreement and temporary tariff reductions that signal easing global tensions.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) rose by 1.81% to 732.5 yuan ($101.51) per metric ton as of 0215 GMT, after hitting a session high of 736.5 yuan — the strongest since April 7.
Similarly, on the Singapore Exchange, benchmark June iron ore was up 1.6% at $101.1 a ton, reaching a peak of $101.45, the highest since April 4.
Trade Truce Boosts Market Sentiment
The bullish momentum came after China announced a 90-day reduction of tariffs on US goods to 10%, starting Wednesday. In response, the US lowered its “de minimis” tariff for low-value Chinese imports to as low as 30%.
US President Donald Trump added to the momentum by expressing willingness to directly engage with Chinese President Xi Jinping on the final terms of the deal.
These developments reignited hopes for a lasting resolution to the long-standing trade conflict, improving the global economic outlook and boosting demand expectations for key commodities like iron ore.
Supply Disruption Adds to Rally
Further pushing prices upward was news that Shougang Hierro Peru, a Chinese-owned mining firm, suspended operations after part of its dispatch infrastructure collapsed at its shipping port. Repairs are expected to take four to five months, forcing the steelmaker to increase spot market purchases to maintain production levels.
Steel Inputs Also Rise
Other steelmaking raw materials joined the rally:
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Coking coal rose 0.97%
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Coke was up 0.86%
On the Shanghai Futures Exchange, steel benchmarks posted gains:
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Rebar: +0.65%
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Hot-rolled coil: +0.74%
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Wire rod and stainless steel: +0.93%
With demand improving and supply constraints mounting, iron ore and related steel inputs are likely to remain firm in the near term, barring any unforeseen geopolitical developments.
