Futures of the steelmaking material declined as much as 1.3% after the president’s threat, which he said was in response to China sending the drug fentanyl to North America. While the US is not a key importer of Chinese steel, its tariffs could impact the domestic market and dampen the prospect of economic recovery.
Iron ore prices slumped by more than a quarter in 2024, as China’s economic problems and real estate-sector crisis weighed on demand, while big miners in Australia and Brazil boosted supplies. Prices have edged up 3% this year on more positive signs in the Chinese economy, along with optimism Beijing could implement more stimulus.
Trump’s levy threat against China came a day after his announcement that he may enact tariffs of as much as 25% tariffs on Mexico and Canada at the start of February. That triggered a slump in prices of base metals on the London Metal Exchange, which has extended into Wednesday’s trading.
Futures of iron ore were 0.8% lower in Singapore at $103.95 a ton at 1:59 p.m. local time. Yuan-priced contracts in Dalian and steel prices in Shanghai also fell.
Copper on the LME fell 0.5% to $9,243 a ton, down from its highest close in more than two months. Aluminum and nickel also declined.
