Benchmark contracts for steel products used in construction and manufacturing slumped as worries increased over prospects for demand in top steelmaker China, dragging prices of steelmaking raw materials. The most-traded January 2020 construction material rebar on the Shanghai Futures Exchange ended 1.9% lower at 3,372 yuan ($475.41) a tonne, its weakest finish since Feb. 20 this year.
Hot-rolled coil, steel used in cars and home appliances, dropped 1.7% to 3,660 yuan a tonne. US President Donald Trump announced an additional 5% duty on some $550 billion in targeted Chinese goods on Friday, hours after China unveiled retaliatory tariffs on $75 billion worth of US goods.
China is willing to resolve its trade dispute with the United States through "calm" negotiations and resolutely opposes the escalation of the conflict, Vice Premier Liu He, who has been leading the talks with Washington, said on Monday. "The US-China trade war has intensified, and aside from the direct impact of tariffs, the uncertainty generated by the conflict is proving to be toxic for business confidence and investment decisions," Westpac IQ said in a note.
The most-traded January 2020 iron ore on the Dalian Commodity Exchange dropped 1.7% to 593.50 yuan a tonne, with rising stockpiles at China's ports also weighing on prices.
Benchmark 62% iron ore for delivery to China, as assessed by SteelHome consultancy, was steady at $86.50 a tonne for a third day in a row on Friday, the lowest since March 29 this year. Imported iron ore inventory at China's ports rose steadily for six straight weeks, hitting 124.65 million tonnes, as of Friday, data from SteelHome showed, the highest since the end of May this year.
In the Singapore Exchange, the front-month September 2019 iron ore contract was down 4.6% at $83.15 a tonne in late trade.