Iron Ore Price Up as a Consequence of the Rus- sia-Ukraine Conflict

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Iron Ore Price Up as a Consequence of the RussiaUkraine Conflict

Concerns that a lengthy armed war between Russia and Ukraine could stifle global supply drove up iron ore prices.

On China's Dalian Commodity Exchange, the most-traded May iron ore contract finished daytime trading 2.7 percent higher at 705.50 yuan ($111.82) per ton.

The most active April contract for iron ore climbed as much as 3.3 percent to $141.25 a ton on the Singapore Exchange. According to sources, benchmark 62 percent Fe fines imported into Northern China were trading for $138.09 a ton this morning, up 2.6 percent.

"Any extended war campaign will have a significant impact on Russia and Ukraine's yearly iron ore shipments, which total about 70 million tons, gradually narrowing the global balance," said Atilla Widnell, managing director of Navigate Commodities in Singapore. While Russia and Ukraine are not important iron ore suppliers to China, the two countries are presently at odds and frequently sell the steelmaking material to other European countries. Since the incursion began, exports of Russia's leading steelmakers have decreased, as have nickel shipments.

In a note, Goldman Sachs analysts stated that Russia's metal shipments are declining, and purchasers are "hesitant in the backdrop of sanction uncertainty and escalation."

The benchmark iron ore futures logged weekly gains of 19.4%, the most since the week ended Feb. 21, 2020, recovering losses since Feb.11 when regulators stepped up measures to rein in raw material prices. "Ukraine and Russia are important exporters for iron ingredient in the world ... uncertainties lie in how long the conflict will last," GF Futures analysts wrote in a note, adding that iron ore prices are expected to fluctuate in the near term.

Spot 62% iron ore for delivery to China gained $6.5 to $154 a tonne on Thursday, data compiled by SteelHome consultancy showed.

Dalian coking coal futures ended 1.4% higher at 2,869 yuan a tonne and coke prices were up 1.8% at 3,585 yuan per tonne. For the week, prices rose 14% and 13% respectively. Stainless steel prices on the Shanghai Futures Exchange for