Iron ore slips to 6-1/2-month low as global trade war intensifies

By Amy Lv and Lewis Jackson

BEIJING, April 9 (Reuters) - Iron ore futures dropped on Wednesday to their lowest levels in more than six months, as demand prospects were clouded by the escalation of a global trade war triggered by U.S. President Donald Trump's broad tariffs.

The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 was down 2.9% at 687 yuan ($93.47) a metric ton, as of 0311 GMT. Earlier in the session, the contract hit its lowest point since September 24 at 670.5 yuan a ton.

The benchmark May iron ore SZZFK5 on the Singapore Exchange was trading 1.16% lower at $93.65 a ton. The contract had earlier dropped to its lowest level since September 24, reaching $91.70 per ton.

Both benchmarks have slid more than 10% so far in April.

The U.S. said on Tuesday that 104% duties on imports from China will take effect shortly after midnight, following Beijing's refusal to yield to what it described as blackmail, with a vow to "fight till the end".

"The impact of the heightened tariffs on the market have aggravated, pressuring iron ore prices in the short term," analysts at First Futures said in a note.

Other steelmaking ingredients on the DCE similarly slumped, with coking coal DJMcv1 and coke DCJcv1 down 3.77% and 3.33%, respectively.

Steel benchmarks on the Shanghai Futures Exchange slid on lower raw material prices.

Rebar SRBcv1 fell 1.6%, hot-rolled coil SHHCcv1 shed 1.51%, wire rod SWRcv1 lost 0.4% and stainless steel SHSScv1 retreated 1.6%.

Intensified concerns over the demand outlook, worsened by escalating trade tensions between the world's two largest economies, have further undermined prices for steel and steelmaking ingredients.

Analysts said the expectation of reduced domestic steel consumption in the coming months, along with construction activities being hindered by the summer's high temperatures, also weighed on the ferrous market.

($1 = 7.3498 Chinese yuan)