Iron ore rebounds despite Trump's tariff threat triggering caution

BEIJING, July 8 (Reuters) - Iron ore futures prices rebounded on Tuesday, supported by resilient near-term demand in top consumer China, although caution triggered by U.S. President Donald Trump's threat of higher tariffs capped gains.

The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 added 0.14% to 733 yuan a metric ton, as of 0244 GMT.

The benchmark August iron ore SZZFQ5 on the Singapore Exchange was 0.55% higher at $95.75 a ton, as of 0234 GMT.

Near-term consumption for iron ore remained firm, as reflected by the relatively high hot metal output, a gauge of iron ore demand, underpinning prices of the key steelmaking ingredient.

Also, supporting price was falling portside iron ore inventory which declined 0.4% from the week before to 144.04 million tons as of July 7, data from consultancy Mysteel showed.

But price gains were limited by the resuming trade tensions worldwide.

Trump on Monday began telling trade partners - from powerhouse suppliers such as Japan and South Korea to minor players - that sharply higher U.S. tariffs will start August 1, marking a new phase in the trade war he launched earlier this year.

Other steelmaking ingredients on the DCE were mixed, with coking coal DJMcv1 up 0.54% and coke DCJcv1 little changed.

Steel benchmarks on the Shanghai Futures Exchange moved sideways. Rebar SRBcv1 dipped 0.13%, hot-rolled coil SHHCcv1 nudged down 0.06%, wire rod SWRcv1 was flat and stainless steel SHSScv1 advanced 0.63%.

"The (steel) market focus has shifted back to seasonally weak fundamentals after the wave of frenzy amid pledges of crackdown on price war receded," said Zhuo Guiqiu, analyst at broker Jinrui Futures.

"But the downside room will likely be limited as there is no big conflict in supply and demand for now."