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Iron ore breaks six-day winning streak due to falling oil prices and swollen inventories

Iron ore futures in Dalian ended six sessions of gains on Tuesday, as oil prices fell and portside inventories increased. This dip may only be temporary as an expected rise in hot metal production is likely to push demand and prices up.

As of 0303 GMT, the most-traded contract for May iron ore on China's Dalian Commodity Exchange was trading 0.19% lower. It was 780.5 Yuan ($113.35), per metric ton.

The benchmark iron ore for April on the Singapore Exchange rose 0.13% to $103.2 per ton.

Oil prices fell below $90 Tuesday, after reaching their highest level in over three years the previous session. U.S. president Donald Trump had said that the Middle East war could end soon. This eased concerns about long-term disruptions in global oil supply.

The cost of freight and premiums for war risk would be reduced if oil prices fell and the Iran war de-escalated.

Customs data revealed on Tuesday that China's imports of iron ore grew 10% over the same period last year.

Iron ore arrivals at 47 Chinese ports increased between March 2-8. Portside inventories also grew. According to Mysteel's data, the price of steel is falling.

Mysteel said that the same period had seen a drop in weekly shipments from Brazil and Australia. This could have slowed down price declines.

After March 11, production restrictions for China's annual parliament meeting will be lifted. This will lead to an increase in demand for steelmaking materials.

Coking coal and coke, which are used to make steel, have both fallen in price, by 3.64% apiece.

A report by Guoyuan?Futures Research said that coke and coal closely track energy prices and have therefore risen and fallen in tandem with crude oil.

Steel benchmarks at the Shanghai Futures Exchange fell mainly. Hot-rolled coils fell 0.12%, rebar 0.45% and stainless steel 2.05%. Wire rod, meanwhile, advanced by 1.1%. ($1 = 6.8855 Yuan) (Reporting and editing by Ronojojo Mazumdar).

(source: Reuters)