Iron ore firms after deep losses as easing U.S.-China tensions support
Dalian iron ore futures rose on Tuesday with the market gaining for the first time in four sessions on expectations of lower U.S. tariffs on Chinese goods, although fears of a global recession capped gains.
Asian shares eked out their best day in a week as positive economic data and hints of easing Sino-U.S. tensions offered some respite after recent sell-offs, though fears of sky-high inflation tempered the mood.
The most-traded iron ore on the Dalian Commodity Exchange closed 1.4% higher at 742.5 yuan ($110.87) a tonne. On the Singapore Exchange, the front-month contract added 3.1% to $112.05 a tonne.
Rebar on the Shanghai Futures Exchange SRBcv1 rose 0.6% while coking coal gained 1.1%.
“It’s worth highlighting that steel demand in China picked up in June as lockdowns were eased in Shanghai,” Commonwealth Bank of Australia analyst Vivek Dhar wrote in a note.
“China’s zero-COVID policy though has raised doubts whether this level of demand growth can be sustained. Iron ore prices will also have to contend with steel output restrictions later this year as well due to policy to reduce steel output in 2022.”
Offering brief respite to markets was a report that U.S. President Joe Biden was leaning towards a decision on easing tariffs on goods from China as well as news Chinese vice premier Liu He had spoken to U.S. Treasury Secretary Janet Yellen.
A survey showing China’s services activity at the fastest pace in almost a year also lifted sentiment.
Source: Reuters (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips)