SGX iron ore retreats on demand woes as China sticks to anti-COVID strategy

June 29 (Reuters) - Singapore iron ore futures retreated on Wednesday after a two-day rally, while the Dalian market trimmed gains after Chinese President Xi Jinping said the country should stick to its "effective" pandemic management strategy.

China's adherence to strict anti-COVID measures even as the rest of the world tries to live with the virus has battered its economy, dampening demand in the world's biggest steel producer and iron ore importer.

Iron ore's front-month July contract on the Singapore Exchange SZZFN2 was down 2.2% at $121.50 a tonne, as of 0706 GMT.

SGX iron ore hit its highest since June 17 on Tuesday at $125.10 a tonne, while benchmark 62%-grade iron ore's spot price climbed $3 to $124, based on SteelHome consultancy data, as China eased quarantine requirements for international arrivals. SH-CCN-IRNOR62.

COVID-19 testing mandates have also been scrapped or relaxed in several Chinese cities, easing worries about demand for steel products and inputs, but officials clarified the moves were still consistent with Beijing's zero-COVID policy.