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Iron ore prices rise as traders celebrate Sino-US trade progress

Prices of iron ore futures rose on Wednesday as progress was made in trade negotiations between the two world's largest economies. However, uncertainty about a final deal and a softening in steel demand limited further gains.

After two days of intense negotiations in London, officials from the United States, the largest iron ore buyer in the world, and China, which is the second-largest consumer, have agreed on a framework that will put their trade truce on track.

This has helped to boost prices by boosting the market sentiment.

China buys over two thirds of the global seaborne supply.

As of 0219 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was up 0.86% to 706 yuan (98.24 dollars) per metric ton. The contract lost nearly 1% of its value on Tuesday.

The benchmark July Iron Ore at the Singapore Exchange rose 0.55% to $94.9 per ton.

Coking coal and coke, which are used to make steel, have both gained in value, rising by 1.35% and 0.67 percent, respectively.

Steel benchmarks at the Shanghai Futures Exchange rose on higher raw material costs, but weak downstream demand limited gains.

Rebar grew by 0.61%. Hot-rolled coil grew by 0.81%. Wire rod climbed 0.55%. Stainless steel fell 0.28%.

Galaxy Futures analysts said that "Steel consumption is rapidly declining as we enter the off-peak season."

The state-backed China Iron and Steel Association, which is concerned about the stability of the market, called for a boycott on Tuesday to stop the "rat race" style of competition. This was in response to spillover effects from the fierce price war between domestic automakers.

(source: Reuters)