Iron ore drifts down as China deflation persists

BEIJING: Iron ore futures prices slipped on Monday, as weak data from top consumer China weighed on investor sentiment, although hopes of progress in trade talks between the world’s two largest economies limited losses.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded little changed at 707.5 yuan ($98.45) a metric ton, as of 0215 GMT.

The benchmark July iron ore on the Singapore Exchange was 0.22% lower at $95.3 a ton.

China’s consumer prices fell for a fourth-straight month in May and producer deflation deepened to its worst level in almost two years, as the economy faces headwinds from trade tensions and a prolonged housing downturn.

Three of US President Donald Trump’s top aides will meet with their Chinese counterparts in London on Monday for talks aimed at resolving a trade dispute between the two superpowers that has kept global markets on edge.

While both countries agreed on a 90-day trade truce on May 12 in Geneva, that temporary deal did not address broader concerns straining the bilateral relationship.

Iron ore rebounds on short-covering

Therefore, the market is eager to see whether a final deal will be agreed, easing pressure on global economic growth.

Other steelmaking ingredients on the DCE were mixed, with coking coal adding 0.45% and coke down 0.52%.

Steel benchmarks on the Shanghai Futures Exchange were rangebound. Rebar and hot-rolled coil were little changed, wire rod shed 0.18% and stainless steel ticked down 0.47%.