By Michele Pek
SINGAPORE (Reuters) – Dalian iron ore futures rose on Friday after a nine-session losing streak, but were set for a weekly fall, weighed down by reports of steel production cuts in China and an intensifying trade war between Washington and Beijing.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) climbed 0.65% to 777.5 yuan ($107.28) a metric ton by 0302 GMT. The contract has fallen 3.12% so far this week.
The benchmark April iron ore on the Singapore Exchange was 0.14% higher at $100.5 a ton, losing 1.89% so far this week.
Sentiment in commodity markets was buoyed by Beijing’s efforts to support economic growth, said ANZ analysts.
China unlocked more fiscal stimulus on Wednesday, promising greater efforts to support consumption and boost domestic demand.
Chinese officials on Thursday left the door open to more stimulus measures on top of those announced at this week’s annual parliament meeting if economic growth veered off track.
These moves follow fresh trade measures, as Washington has added an extra 20% on existing tariffs for Chinese goods, with the latest 10% increment enforced on Tuesday, drawing Beijing’s retaliation.
Meanwhile, steel production cuts in China may increase iron ore supply, intensifying pressure on ore prices, said Hexun Futures.
China will restructure its giant steel industry through output cuts, although it did not announce any target in its most recent intervention to address overcapacity in the sector.
Still, steel daily output logged a month-on-month increase of 13% in February, while crude steel output increased 5%, Hexun said in a separate note, citing data from the China Iron and Steel Association.
Other steelmaking ingredients on the DCE rose, with coking coal and coke up 1.88% and 1.01%, respectively.
Steel benchmarks on the Shanghai Futures Exchange traded sideways. Wire rod edged 0.2% higher, stainless steel was up 0.75%, while rebar eased 0.12% and hot-rolled coil lost 0.15%.
($1 = 7.2472 Chinese yuan)
(Reporting by Michele Pek; Editing by Subhranshu Sahu)
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