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Iron ore prices rise, but a weekly loss is expected due to tariff issues

Dalian iron ore prices rose on Friday, ending a nine session losing streak. However, they were still set to fall by a significant amount each week, due to reports of a reduction in steel production in China, and a escalating trade war between Washington DC and Beijing.

By 0302 GMT, the most traded May iron ore contract at China's Dalian Commodity Exchange rose 0.65% to 777.50 yuan ($107.28). The contract is down 3.12% this week.

The benchmark iron ore for April on the Singapore Exchange is 0.14% higher, at $100.5 per ton. This week it has lost 1.89%.

Analysts at ANZ said that Beijing's efforts in supporting economic growth had boosted sentiment on commodity markets.

China announced more fiscal stimuli on Wednesday and promised to increase efforts to boost consumption and domestic demand.

Chinese officials left the door wide open on Thursday to add more stimulus measures to those announced this week at the annual parliament meeting, if economic growth falters.

Washington increased tariffs on Chinese products by 20%, and Beijing retaliated with a 10% increase.

Hexun Futures said that the steel production cutbacks in China could increase iron ore supplies, increasing pressure on ore price.

China will restructure the giant steel industry by cutting output, despite not announcing any targets in its latest intervention to reduce overcapacity.

Hexun, in a separate report, citing the China Iron and Steel Association, said that despite this, steel daily production increased by 13% month-on-month in February. Crude steel output also increased 5%.

Coking coal and coke, two other steelmaking ingredients, rose on the DCE, by 1.88% and 1.00 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange were flat. The Shanghai Futures Exchange traded sideways.

(source: Reuters)