Iron ore prices edged lower on Friday but remained on track for a weekly gain, buoyed by resilient demand and positive economic signals from China, despite ongoing Sino-US trade tensions triggered by President Trump’s new tariff warnings.
Demand Stays Strong Amid Uncertainty
On China’s Dalian Commodity Exchange (DCE), the most-traded September iron ore contract fell 0.84% to 705.5 yuan ($96.69) per metric ton during morning trade. However, it still marked a 0.2% weekly increase.
Similarly, on the Singapore Exchange, benchmark May iron ore declined slightly by 0.16% to $97.65 per ton but achieved a 0.5% weekly gain.
Firm short-term demand supports the market’s strength. According to a Mysteel survey, daily hot metal output, a key indicator of iron ore consumption, remains robust at a 17-month high of 2.4 million tons.
Economic Data and Stimulus Hopes Provide Lift
Investor sentiment has also been lifted by better-than-expected Chinese economic data and anticipation that Beijing may introduce additional stimulus measures to mitigate the effects of new U.S. tariffs.
Despite this optimism, analysts remain cautious. Goldman Sachs predicts that iron ore prices will retreat to $90 per ton by Q4 2025, and $80 by Q4 2026, citing a market surplus expected in the latter half of the year. The firm also warned that Trump’s tariffs could suppress both domestic demand in China and its steel exports.
Market Eyes on US-China Trade Developments
While President Trump has suggested a possible cooling-off period in the ongoing US-China tariff exchanges, markets are watching closely for tangible progress in easing trade tensions.
Mixed Performance in Steelmaking Inputs
Other steelmaking materials did not fare as well. On the DCE, coking coal and coke fell 3.13% and 2.08%, respectively. On the Shanghai Futures Exchange, major steel benchmarks such as rebar (-0.58%), hot-rolled coil, and stainless steel (-0.66%) also declined, though wire rod gained 0.57%.
