Latest News

Iron ore declines due to supply concerns in Australia and a weaker US dollar

Iron ore declines due to supply concerns in Australia and a weaker US dollar

Iron ore futures climbed higher on Thursday due to a weaker dollar and supply problems in Australia, as investors waited for new developments regarding the trade war between China and the United States.

After closing lower the previous session, the most-traded contract for May iron ore on China's Dalian Commodity Exchange ended daytime trading 1.43% higher. It was 817.5 Yuan ($112.22) per metric ton.

At 0706 GMT, the benchmark March ore price on Singapore Exchange was 2.08 % higher at $105.95 per ton.

Hexun Futures, a Chinese consultancy, said that Australia is currently in hurricane season and that there was a potential for disruptions in shipments.

Rio Tinto, a leading iron ore supplier in Australia, said that it has begun to remove iron ore from two ports in Western Australia as two tropical storms have complicated efforts to repair the infrastructure damaged by last month's cyclone.

Analysts believe that Rio's port woes could increase the risk premium on iron ore.

Western Australia's cyclone season usually occurs between November to April.

The weaker dollar also helped to support prices. It was near its lowest level since last week's start.

A weaker dollar makes greenback-denominated commodities more affordable for overseas buyers.

China filed a complaint with the World Trade Organization on Wednesday, against President Donald Trump's 10% tariff on Chinese imports as well as his cancellation of "de minimis exemption". On Wednesday, the Chinese Foreign Ministry called for dialogue between both countries.

Coking coal and coke, which are used to make steel, also advanced on the DCE. They rose by 1.3% and 0.78 %, respectively.

The benchmarks for steel on the Shanghai Futures Exchange have gained some ground. The Shanghai Futures Exchange saw gains in stainless steel, hot-rolled coil, wire rod, and rebar. $1 = 7.2850 Chinese Yuan (Reporting and editing by Subhranshu Sahu, Mrigank Dhaniwala).

(source: Reuters)