Iron Ore and Base Metals Plummet as US Tariffs Loom
Singapore, February 1, 2025 - Iron ore and most base metals have plunged following President Donald Trump's announcement of potential 10% tariffs on all Chinese imports, with February 1 as the proposed start date.
Iron Ore Declines
Futures of the steelmaking ingredient dropped by 1.3% after the president's threat, attributed to China's alleged distribution of fentanyl. While the US is not a major importer of Chinese steel, tariffs could impact the domestic market and hamper economic recovery. Iron ore prices have already fallen significantly in recent years due to China's economic struggles and real estate crisis, despite a modest recovery in 2025.
Base Metals Follow Suit
Base metals on the London Metal Exchange (LME) have extended their decline after President Trump's announcement of potential tariffs on Mexico and Canada. Copper on the LME fell by 0.5%, while aluminum and nickel also registered declines.
Market Reaction
Futures of iron ore in Singapore were trading at $103.95 per ton, down by 0.8%. Yuan-priced contracts in Dalian and steel prices in Shanghai also fell. The declines have extended into Wednesday's trading session, indicating ongoing market uncertainty.
This news comes amidst the ongoing geopolitical tensions between the US and China, which continue to cast a long shadow over global trade. Market participants are closely monitoring the situation and its potential impact on the global economy.