Iron ore hits two-week high ahead of Trump-Xi meeting

BEIJING, Oct 29 (Reuters) - Iron ore futures prices gained on Wednesday for a third straight session to hit their highest in two weeks, bolstered by optimism on a trade deal between the world's two largest economies.

U.S. President Donald Trump, who heads to South Korea on Wednesday with high-stakes meetings expected with Chinese President Xi Jinping on Thursday, said that he expects to reduce U.S. tariffs on Chinese goods in exchange for Beijing's commitment to curb exports of fentanyl precursor chemicals.

An easing U.S.-China trade tension has improved the broad risk sentiment, analysts at brokerage Xinhu Futures said in a note.

By 0215 GMT, the most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 rose 1.14% to 798 yuan ($112.03)a metric ton, after touching the highest since October 14 at 802 yuan.

The benchmark December iron ore SZZFZ5 on the Singapore Exchange advanced 0.52% to $106.3 a ton. It hit the highest since October 14 at $106.65 earlier.

Also, the expectation of a flurry of restocking from steel mills in northern China to meet production needs after the conclusion of production curbs lent some support to prices of the key steelmaking ingredient.

Steelmakers in some northern regions including the top steelmaking hub Tangshan city were required to implement production controls from Monday following a forecast of worsening air quality.

Elsewhere, Brazilian miner Vale VALE3.SA said that it remained very optimistic about the long-term iron ore demand.

Coking coal DJMcv1 and coke DCJcv1, other steelmaking ingredients, fell 0.83% and 0.74%, respectively.

Most steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar SRBcv1 added 0.48%, hot-rolled coil SHHCcv1 advanced 0.64%, wire rod SWRcv1 ticked up 0.54% and stainless steel SHSScv1 was little changed.

($1 = 7.1230 Chinese yuan)