BEIJING: Chinese iron ore futures fell for a second straight session on Monday, dented by rising tensions between China and the United States, although analysts said they expect demand for the steelmaking ingredient to remain resilient.
The most active iron ore futures on the Dalian Commodity Exchange, for September delivery, dropped as much as 2.2% to 880 yuan ($126.32) per tonne. The contract closed down 0.6% at 894 yuan.
"The drop in prices should be driven by macro sentiment such as China-US relations, which could hurt some steel-related exports," said Cai Biyu, an analyst with GF Futures, adding that fundamentals for iron ore were still stable.
Spot prices for iron ore with 62% iron content for delivery to China were unchanged from the previous trading day at $118.5 per tonne.
Demand for five main steel products in China recovered last week to levels seen in mid-June, before the rainy season slowed construction activity, according to Reuters calculations based on output and inventory data compiled by Mysteel consultancy.
China's factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of recovery in the world's second-largest economy.
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