April 10, 2018 / 7:30 AM / 17 days ago

UPDATE 1-Dalian iron ore recovers as Xi allays US-China trade row fears

* Xi renews pledge to open China economy, cut tariffs this year

* Rebar inventory at Chinese traders down for third week

* Seasonal demand seen picking up (Adds details, updates prices)

By Manolo Serapio Jr

MANILA, April 10 (Reuters) - China’s iron ore futures jumped nearly 3 percent on Tuesday after a three-day slide as risk appetite returned after comments from Chinese President Xi Jinping helped ease worries over growing trade frictions between China and the United States.

Xi promised to open China’s economy further and lower import tariffs on products including cars, taking a conciliatory tone amid U.S. threats of billions of dollars in tariffs on Chinese goods that have elicited retaliatory measures from Beijing.

Xi’s comments boosted U.S. stock futures and Asian equities and curbed demand for safe-haven assets gold and yen.

Iron ore and steel prices were also spurred higher by expectations of a pickup in seasonal Chinese demand and a sustained drop in steel stockpiles.

The most-traded iron ore for September delivery on the Dalian Commodity Exchange closed up 2.7 percent at 451 yuan ($72) a tonne, rebounding after a three-day slide.

“The physical market is still quite stable. We are expecting seasonal demand to increase consumption which will support raw material prices,” said an iron ore trader in Shanghai.

Activity in the construction sector, a big steel user, typically increases as weather warms after winter.

“It’s still quite cold in some parts of China, so I believe it will take one or two weeks before we see construction work fully start,” the trader said.

Iron ore shipments to China from the Port Hedland terminal in top supplier Australia climbed nearly 12 percent in March from a month earlier to 35 million tonnes.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB rose 0.6 percent to $63.95 a tonne on Monday, according to Metal Bulletin.

The most-active rebar on the Shanghai Futures Exchange rose 1.7 percent to 3,419 yuan per tonne, gaining for a second session running.

In a sign of demand picking up, inventory of construction steel product rebar at Chinese traders dropped for a third consecutive week, standing at 8.73 million tonnes on April 4, data compiled by SteelHome consultancy showed. SH-TOT-RBARIN

That compared to a nearly five-year peak of 9.78 million tonnes in mid-March.

“Inventory at traders dropped at a faster pace because of stronger demand,” Morgan Stanley said in a report, pointing to a 6.5 percent weekly drop in traders’ inventory for major steel products during the same period.

$1 = 6.2969 Chinese yuan Reporting by Manolo Serapio Jr.; editing by Richard Pullin and Vyas Mohan

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