LAUNCESTON, Australia (Reuters) – Iron ore prices look increasingly caught between the bullish reality of lower supply from Brazil and the bearish possibility of weaker demand if President Donald Trump carries out his threat to ramp up his tariff war against China.
The price action in the wake of Trump’s Twitter threat on Sunday to ramp up tariffs on $200 billion of imports from China to 25 percent was indicative of iron ore’s dilemma.
Iron ore futures on the Dalian Commodity Exchange, the most liquid market for the steel-making ingredient, dropped in early trade as investors fretted that the trade talks between the United States and China had been effectively derailed.
They slid as much as 1.9 percent to an intraday low of 622.5 yuan ($91.95) a tonne, but then spent much of the rest of the trading day recovering ground to end only slightly weaker at 633.5 yuan, down just 1 yuan from the previous close.
The turnaround was likely because investors started to focus on another issue for iron ore – the loss of cargoes from Brazil, the world’s number two exporter behind Australia.
For the rest of this article: https://uk.reuters.com/article/uk-column-russell-ironore-china/iron-ore-tugged-between-brazilian-supply-shock-trumps-trade-war-idUKKCN1SD0W8