FX.co ★ Iron Ore Futures Slip Further to Lowest in Over 6 Months

Iron ore futures have declined to approximately CNY 721 per tonne, marking their lowest level since late September 2024. This drop is attributed to escalating trade war tensions and apprehensions about a potential recession. In a retaliatory move against new tariffs imposed by President Trump, China has announced a 34% tariff on all U.S. imports, effective from April 10. Additionally, JPMorgan has increased the likelihood of a global recession to 60%, contributing to market uncertainty. As a fundamental raw material for steel production, iron ore is particularly sensitive to shifts in trade policies and global economic indicators. In China, the foremost importer of iron ore globally, the path to economic recovery remains precarious. Although hot metal production—an essential measure of iron ore demand—increased in March, indicating robust steel consumption, factory activity experienced its quickest growth in four months. Nonetheless, persistent challenges in the property sector continue to impact market sentiment negatively, as property prices in 100 cities have further declined. This ongoing downturn may suppress steel demand for construction and infrastructure projects, potentially decreasing iron ore consumption.