China's steel and iron ore prices were little changed on Tuesday as market participants turned cautious amid escalating trade tension between Washington and Beijing.
On Monday, U.S. President Donald Trump decided to impose 10 percent tariffs on about $200 billion worth of Chinese imports which would be effective on Sept.24.
Trump also warned of more duties on additional $267 billion of Chinese imports if Beijing takes retaliatory action.
"Direct impact of the trade spat on ferrous market is minor as China doesn't sell much steel products to the United States. But people are waiting to see if macro-economic policy will shift," a Shanghai-based trader said.
Benchmark Shanghai rebar futures rose 0.5 percent to 4,132 yuan ($601.11) a tonne as of GMT 0209.
The most-active iron ore contract on the Dalian Commodity Exchange rose 0.3 percent to 503 yuan a tonne.
Credit rating agency Fitch Solutions maintained its forecast on average iron ore prices at $60 per tonne as analysts continue to expect prices to decline in subsequent months and years as Chinese economic growth refocuses away from heavy industry to services which would dampen demand for iron ore.
Investment data indicates a further loss of economic momentum. Fixed-asset investment growth slowed to 5.3 percent in January-August, curbed by slowing infrastructure growth, while real estate investment also moderated amid tight controls from central government.
"Investors expect a cut in banks' reserve requirement ratio (RRR), which would bolster liquidity in the market and drive up prices across commodities," the trader said.
RRR is the amount of cash that some banks must hold as reserves. Latest reserve reduction was taken place in June this year amid concerns over potential economic drag from trade dispute with the U.S.
Other steelmaking raw materials also edged up on Tuesday. Coking coal prices climbed 0.3 percent to 1,300 yuan a tonne, while coke futures gained 0.5 percent to 2,288.5 yuan.
($1 = 6.8739 Chinese yuan renminbi)
(Reporting by Muyu Xu and Josephine Mason; Editing by Vyas Mohan)