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Dalian iron ore falls to near 3-month-low as Sino-US Tariff tension weighs

The price of iron ore futures fell for the third session in a row on Tuesday. This was largely due to the escalating tensions between China and the U.S., which largely overshadowed the seasonal demand for this steelmaking ingredient.

As of 0320 GMT, the most traded May iron ore contract at China's Dalian Commodity Exchange was trading 1.84% lower. It was priced at 748.5 Yuan ($102.15).

In the early part of the session, the prices reached 745.5 Yuan and touched their lowest level since January 9.

The benchmark iron ore for May on the Singapore Exchange fell 1.9% to $95.7 per tonne.

Atilla Wiednell, Navigate Commodities' managing director, said that "Iron Ore Futures have responded unsurprisingly to another escalation of tit-fortat trade between the two world's largest superpowers."

U.S. president Donald Trump announced that he would impose a 50% additional duty on U.S. imported products from China if Beijing didn't remove the 34% tariffs imposed by Beijing on U.S. goods last week.

As Beijing intensified its efforts to stabilize the stock market on Tuesday, several Chinese state-owned firms pledged to increase their share investments, while a number of listed companies announced buybacks. This caused Chinese stocks to recover some recent heavy losses.

Steelmakers have ramped up production in the spring construction season, March and April.

According to data released by Chinese consultancy Mysteel, the total production of iron ore concentrations in domestic mining enterprises reached a new high.

Coking coal and coke, which are both steelmaking ingredients, fell by 1.44% each and 0.47% respectively.

The benchmark steel prices on the Shanghai Futures Exchange have fallen. Hot-rolled coils fell by 0.83%. Wire rods dropped 0.24%. Stainless steel fell 0.58%.

Widnell of Navigate said that this latest escalation increases the likelihood that China will unleash further stimulus. Reporting by Michele Pek, Editing by Sherry Jacobi-Phillips.

(source: Reuters)