Iron Ore Hits One-Month Low on Trump’s Plan to Hike Steel Levies

Futures for the steel-making ingredient fell below $95 a ton on Monday on concerns about an increase in global trade tensions. Trump, who visited a United States Steel Corp. plant on Friday to champion an expected deal between US Steel and Japan’s Nippon Steel Corp., said at the event that the new tariffs would take effect June 4.

“A trade war presents the biggest challenge to the market,” ANZ Group Holdings Ltd. said in a note, adding that any reduction in demand for Chinese steel products could hurt iron ore demand.

Iron ore futures in Singapore fell as much as 0.8% to $94.85 a ton, the lowest intraday level since May 2, before trading at $95.15 at 10:35 a.m. local time. Chinese steel and iron ore futures markets were closed for a national holiday.

“For steel markets, I think the most significant short-term impact is higher US steel prices and lower steel prices elsewhere,” said Vivek Dhar, commodities analyst at Commonwealth Bank of Australia. Lower steel prices, particularly in China, could weigh on margins of the mills and iron ore prices, he said.

On the London Metals Exchange, aluminum fell 0.1% to $2,441 a ton. All other base metals on the exchange advanced.