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SGX iron ore retreats on demand woes as China sticks to anti-COVID strategy

June 29 (Reuters) - Singapore iron ore futures retreated on Wednesday after a two-day rally, while the Dalian market trimmed gains after Chinese President Xi Jinping said the country should stick to its "effective" pandemic management strategy. China's adherence to strict anti-COVID measures even as the rest of the world tries to live with the virus has battered its economy, dampening demand in the world's biggest steel producer and iron ore importer. Iron ore's front-month July contract on the Singapore Exchange SZZFN2 was down 2.2% at $121.50 a tonne, as of 0706 GMT. SGX iron ore hit its highest since June 17 on Tuesday at $125.10 a tonne, while benchmark 62%-grade iron ore's spot price climbed $3 to $124, based on SteelHome consultancy data, as China eased quarantine requirements for international arrivals. SH-CCN-IRNOR62. COVID-19 testing mandates have also been scrapped or relaxed in several Chinese cities, easing worries about demand for steel products and inputs, but officials clarified the moves were still consistent with Beijing's zero-COVID policy. On China's Dalian Commodity Exchange, the most-traded September iron ore contract ended daytime trade 2.3% higher at 803.50 yuan ($119.89) a tonne, extending gains to a fourth session but off an intraday high of 822.50 yuan, Xi, during a visit on Tuesday to the central city of Wuhan where the virus was first reported, said China would accept some temporary impact on economic development rather than let people's lives and health be harmed, Xinhua news agency reported. "With no fundamental shift in the containment strategy, the recent recovery in activity remains fragile, but there is perhaps some movement in the direction of balancing COVID containment with economic activity," said National Australia Bank economist Taylor Nugent. Construction steel rebar on the Shanghai Futures Exchange SRBcv1 rose 1.5%, while hot-rolled coil SHHCcv1 climbed 0.7%. Stainless steel SHSScv1 dropped 0.5%. Dalian coking coal DJMcv1 advanced 3.4% and coke DCJcv1 gained 1.8%. (Reporting by Enrico Dela Cruz in Manila; Editing by Sherry Jacob-Phillips and Rashmi Aich) ((enrico.delacruz@thomsonsonreuters.com)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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