Iron ore tells a different story to the China tariff pain narrative

LAUNCESTON, Australia, May 8 (Reuters): Concern is mounting over just how big a hit the Chinese economy is going to take from the massive tariffs imposed by the United States, but so far the commodity most at risk is seemingly unaffected.

Iron ore is the major commodity most exposed to China, given that the world's second-biggest economy buys more than 70 per cent of all seaborne volumes, which it uses to produce just over half of global steel.

But iron ore prices and import volumes have been largely resilient since US President Donald Trump launched his trade war against China, which has escalated to the point where the United States imposes a tariff of 145 per cent on its hitherto biggest trading partner.

Iron ore contracts traded on the Singapore Exchange ended at $99.35 a metric ton on Wednesday, having climbed since hitting a seven-month low of $96.20 on May 1.

The price has been trading in a relatively narrow range since October, with a high of $110.55 early in that month and the low at the start of May.

At the same time China's imports of iron ore have eased slightly, with customs data showing first quarter arrivals down 7.8 per cent from the same period a year earlier to 285.31 million tons.