Iron ore futures decline amid trade tensions and steel production cuts

Iron ore futures remained under pressure on Tuesday, marking their seventh consecutive session of decline. The drop was driven by ongoing U.S.-China trade tensions and steel production curbs in China.

U.S. President Donald Trump recently imposed an additional 10pct tariff on Chinese goods, bringing the total new tariffs introduced in the past month to 20pct. In response, China retaliated with tariffs of 10-15pct on select U.S. imports starting March 10, along with new export restrictions targeting specific U.S. entities.

The decline in iron ore futures deepened as reports emerged that Chinese steel mills are cutting production to curb pollution ahead of the National People’s Congress meeting in Beijing. In Tangshan, a key production hub, steelmakers have halted operations to ensure clear skies, with speculation that the government may impose further capacity cuts. The industry also faces pressure from weakening domestic demand and export uncertainties due to trade tensions, according to ING analysts.

Market attention is now on the “Two Sessions” parliamentary meetings, which started today, as investors anticipate economic policies aimed at achieving Beijing’s 5pct growth target.

On the Dalian Commodity Exchange, the most-traded May iron ore contract fell 1.14pct to 781 yuan (USD 107.1) per ton. Coke and coking coal futures also declined, dropping 1.74pct and 1.71pct to 1,666 yuan (USD 229) and 1,091 yuan (USD 150) per ton, respectively.

On the Shanghai Futures Exchange, rebar futures fell 1.11pct to 3,282 yuan (USD 450) per ton, while HRC futures declined 0.79pct to 3,398 yuan (USD 466) per ton. Wire rod futures dropped 0.9pct to 3,510 yuan (USD 482) per ton. Stainless steel futures, however, inched up 0.04pct to 13,245 yuan (USD 1,818) per ton.

1 USD / 7.28 yuan