Iron ore and most base metals prices fell after US President Donald Trump said he would impose a 10% tariff on all Chinese imports, suggesting that February 1 could be the date they would likely take effect.
Futures for the steel-making metal fell about 1.3% after the US president’s threat, which he described as a response to China’s smuggling of fentanyl into North America. Although the United States is not among the largest importers of Chinese steel, the tariffs could weigh on the domestic market and dampen the chances of an economic recovery.
Iron ore prices have fallen by more than a quarter in 2024, as economic woes and a property crisis in China have weighed on demand, while supplies from major mining companies in Australia and Brazil have increased at the same time. Prices have risen 3% this year on growing positive signals from the Chinese economy, as well as optimism that Beijing will implement more economic stimulus measures.
Trump’s threat to impose tariffs on China came a day after he said he could impose tariffs of up to 25% on Mexico and Canada in early February. That sent base metals prices on the London Metal Exchange lower, and the slide continued into Wednesday’s trading.
Iron ore futures fell 0.8% to $103.95 a tonne in Singapore at 1:59 p.m. local time, while yuan-denominated contracts in Dalian and Shanghai steel prices also fell.
Meanwhile, copper on the London Metal Exchange fell 0.5% to $9,243 a tonne, down from its highest close in more than two months, while aluminium and nickel prices also fell.