Iron ore falters on higher imports, Chinese steel export concerns

By Michele Pek

SINGAPORE, Feb 27 (Reuters) - Iron ore futures prices dropped more than 1% on Thursday, pressured by escalating tariff measures against Chinese steel and an increase in iron ore imports into top consumer China.

The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended morning trade 1.05% lower at 803 yuan ($110.48) a metric ton.

The benchmark March iron ore SZZFH5 on the Singapore Exchange was trading 1.4% lower at $104.4 a ton.

Australian shipments have increased significantly, and Brazil shipments have also rebounded, while the output of molten iron has decreased month-on-month, broker Hexun Futures said in a note.

Also impacting sentiment for the key steel-making ingredient was a lacklustre outlook for Chinese steel exports, as more countries impose tariffs on Chinese steel products.

After U.S. President Donald Trump's decision earlier this month to impose 25% tariffs on all steel products, Vietnam announced a temporary anti-dumping levy on Chinese steel, with South Korea provisionally deciding to impose up to 38% tariffs on Chinese steel plate imports.

The EU is also considering steel import curbs following Trump's tariff threats.

Still, daily crude steel output in mid-February among member mills of the China Iron and Steel Association (CISA) hit a seven-month high of 2.15 million tons, said Mysteel in a separate note, citing statistics from CISA.

Steel benchmarks on the Shanghai Futures Exchange traded sideways. Rebar SRBcv1 edged 0.03% lower and hot-rolled coil SHHCcv1 dipped nearly 0.1%, while wire rod SWRcv1 traded flat and stainless steel SHSScv1 gained 0.57%.

Other steelmaking ingredients on the DCE posted modest losses, with coking coal DJMcv1 and coke DCJcv1 down 0.41% and 0.36%, respectively.

($1 = 7.2682 Chinese yuan)