Iron ore futures edge up amid cautious market sentiment

Iron ore futures posted modest gains on Tuesday, supported by near-term demand, even as market sentiment remained cautious due to a rise in protectionist measures targeting Chinese steel exports.

India recently imposed a 12pct safeguard tariff on flat steel imports, primarily aimed at curbing inflows from China. This move adds to the growing number of countries implementing protectionist policies to shield their domestic steel industries from Chinese competition.

Despite this, the iron ore market found support from robust steel production and declining inventory levels at major Chinese ports.

However, traders expressed concerns over a seasonal cooling of demand and the potential for reduced steel exports in the coming months, casting a bearish outlook on the market. Analysts suggest that in order to sustain steel demand, Beijing may need to roll out new policies to stimulate domestic consumption.

Investors are closely monitoring the upcoming session of China’s top legislature, scheduled for late April, for policy signals, especially against the backdrop of escalating trade tensions between China and the United States.

On the Dalian Commodity Exchange, the most-traded September iron ore contract inched up 0.21pct to 711 yuan (USD 97.4) per ton. In contrast, coke and coking coal futures saw notable declines, falling 1.83pct and 2.42pct to 1,530.5 yuan (USD 210) and 928.5 yuan (USD 127) per ton, respectively.

Meanwhile, on the Shanghai Futures Exchange, rebar futures dropped 0.74pct to 3,075 yuan (USD 422) per ton, while HRC futures fell 0.81pct to 3,171 yuan (USD 435). Wire rod futures slipped 0.8pct to 3,339 yuan (USD 458), and stainless steel futures declined 0.63pct to 12,690 yuan (USD 1,740) per ton.

1 USD / 7.29 yuan