Iron ore prices climbed on Monday over concerns that a prolonged armed conflict between Russia and Ukraine could curb global supply.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange ended daytime trading 2.7% higher at 705.50 yuan ($111.82) a tonne.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $138.09 a tonne during morning trading, up 2.6% compared to Friday’s closing.
“Any prolonged military campaign will severely impact annual iron ore exports totaling almost 70 million tonnes from Russia and Ukraine, eventually tightening the global balance,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.
While Russia and Ukraine are not major suppliers of iron ore to China, the two countries now at war usually export the steelmaking ingredient to other European countries.
Russia’s top steelmakers have seen exports drop since the incursion began, while nickel shipments have also been affected, people with knowledge of the matter told Bloomberg.
Russia’s metal shipments are falling and buyers are “hesitant in the context of sanction uncertainty and escalation,” Goldman Sachs analysts said in a note.
Ukrainian iron-ore miner Ferrexpo Plc said on Friday the availability of rail capacity to ship its pellets to customers in Europe was unclear. The London-listed company, which operates three mines in central Ukraine, said it’s delaying the publication of its full-year results.
