Iron ore futures slid on Friday, weighed down by dwindling demand and rising inventories in top consumer China, but hopes of a trade deal between the world’s two-largest economies kept prices on track for weekly and monthly gains.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.56% lower at 800 yuan ($112.31) a metric ton. The contract logged a 3.7% weekly gain.

By 0736 GMT, the benchmark December iron ore (SZZFZ5) on the Singapore Exchange fell 0.19% to $106.25 a ton, but was up 2.4% for the week so far.

Both benchmarks posted a monthly gain of around 2% on optimism of a trade deal during a meeting between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, on Thursday.

Following the meeting, Trump said he had agreed with Xi to lower 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 macro-led driving forces receded after the Trump-Xi meeting, analysts at broker First Futures said.

But as the macro boost had been fully priced in, investors shifted focus back to the weakening fundamentals of the key steelmaking ingredient.

Average daily hot metal output, a gauge of iron ore demand, fell 1.5% week-on-week to 2.36 million tons as of October 30, while portside inventories rose 0.8% in the same period, data from consultancy Mysteel showed.

Further pressuring prices was downbeat data, with China’s factory activity shrinking for a seventh month in October, an official survey showed on Friday.

Coking coal and coke (DCJcv1), other steelmaking ingredients, shed 0.92% and 1.11%, respectively.

Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar RBF1! shed 0.48%, hot-rolled coil EHR1! dipped 0.72%, stainless steel slipped 0.82%, and wire rod (SWRcv1) lost 0.21%.
Source: Reuters