Dalian iron ore slumps to near 3-month low as Sino-US tariff tension weighs

By Michele Pek

SINGAPORE, April 8 (Reuters) - Iron ore futures prices fell for a third consecutive session on Tuesday, pressured by escalating trade tensions between the U.S. and top consumer China, largely outweighing support from seasonal demand for the steelmaking ingredient.

The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 traded 1.84% lower at 748.5 yuan ($102.15) a metric ton, as of 0320 GMT.

Earlier in the session, prices hit 745.5 yuan to touch their lowest levels since January 9.

The benchmark May iron ore SZZFK5 on the Singapore Exchange was 1.9% lower at $95.7 a ton.

"Iron ore futures have unsurprisingly responded to yet another escalation in tit-for-tat trade measures between the world's two largest superpowers," said Atilla Widnell, managing director at Navigate Commodities.

U.S. President Donald Trump said he would impose an additional 50% duty on U.S. imports from China on Wednesday if Beijing did not withdraw the 34% tariffs it had imposed on U.S. products last week.

Meanwhile, several Chinese state firms vowed on Tuesday to increase share investment while a slew of listed companies announced share buybacks as Beijing stepped up efforts to stabilise the stock market, causing Chinese equities to claw back some recent heavy losses on Tuesday.

Trade war woes have largely countered rising demand for the steelmaking ingredient, as steelmakers ramp up production during the peak construction season in March and April.

The total output of iron ore concentrates among domestic mining enterprises touched a nine-month high, according to weekly data from Chinese consultancy Mysteel.

Other steelmaking ingredients on the DCE languished, with coking coal DJMcv1 and coke DCJcv1 down 1.44% and 0.47%, respectively.

Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar SRBcv1 edged around 0.3% lower, hot-rolled coil SHHCcv1 fell 0.83%, wire rod SWRcv1 eased 0.24% and stainless steel SHSScv1 was down 0.58%.

Still, this latest escalation in the U.S.-initiated trade measures significantly increases the probability of China unleashing further stimulus, Navigate's Widnell said.

($1 = 7.3272 Chinese yuan)