Iron ore prices for cargoes with 62% iron content remained steady above $101 per ton in late January, holding relatively unchanged for more than a week.
Iron ore holds steady amid tariff worries
This price stability comes amid ongoing uncertainty surrounding US President Donald Trump’s proposed tariff plans, which could disrupt global commodity trade. Trump recently unveiled intentions to impose tariffs on a range of imports, including chips, pharmaceuticals, steel, aluminum, and copper, in an effort to boost domestic production and reduce reliance on foreign goods. These announcements have caused market participants to remain cautious, as the potential for retaliatory measures or shifts in trade dynamics adds an element of unpredictability to global markets.
Eyes on tariffs
Traders, in particular, are keeping a close watch on the February 1st deadline for the first round of tariffs targeting key trade partners such as China, Mexico, and Canada. These tariffs, which were initially outlined by the President, are expected to have significant implications for international trade relations and could create further volatility in commodity markets, including iron ore. As a result, market participants are hesitant to make large commitments, leading to subdued trading activity.
Expectations on trading volumes
In addition to these geopolitical concerns, trading volumes are expected to remain subdued throughout the period, as Chinese markets are closed for the week-long Lunar New Year holiday. This seasonal break typically reduces market liquidity, as many Chinese traders and investors take time off, further contributing to the overall cautious mood in the market. With these various factors at play, iron ore prices are likely to remain in a holding pattern until clearer developments emerge regarding trade policy and global economic conditions.
