Iron ore futures pulled back on Thursday, as a bout of profit-taking took toll after the meeting between leaders of the world’s top two economies.

U.S. President Donald Trump said on Thursday he had agreed with Chinese President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming U.S. soybean purchases, and keeping rare earths exports flowing.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! pared some gains to close daytime trade 0.38% higher at 802.5 yuan ($112.66) a metric ton, after hitting a more than one-month high of 810.5 yuan earlier in the session.

The benchmark December iron ore (SZZFZ5) on the Singapore Exchange was down 0.48% at $106.65 a ton, as of 0700 GMT, after touching its highest since October 14 at $107.6 earlier in the session.

“The recent price rally, mainly benefiting from improved macro sentiment, had already beat expectations, while thinning spot trading failed to inject similar-scale momentum to spot prices, so it’s not surprising to see futures prices correct down after hitting a recent peak,” said Steven Yu, a senior analyst at consultancy Mysteel.

Expectations of an accelerated pickup in portside inventories also put pressure on prices, Yu added.

While cheering the macro-related boost, investors were cautious of signs of a seasonal slowdown in steel demand.

China’s factory activity likely shrank for a seventh month in October, as producers’ efforts to offload goods abroad merely exported the price wars weighing on them at home.

“Some investors booked profits on concerns over a price reversal, leading to a price softening,” said a Zhejiang-based trader on condition of anonymity as he is not authorised to speak to media.

Coking coal NYMEX:ACT1! and coke (DCJcv1), other steelmaking ingredients, gathered further steam on expectations of constrained supply, up 1.62% and 0.59%, respectively.

Steel benchmarks on the Shanghai Futures Exchange retreated. Rebar RBF1! dipped 0.38%, hot-rolled coil EHR1! shed 0.33%, stainless steel HRC1! slid 0.39% while wire rod (SWRcv1) ticked up 0.42%.
Source: Reuters