On the Singapore Exchange, iron ore’s most-active April contract rose as much as 3.3% to $141.25 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.
As this month’s Beijing Winter Olympics has ended, rebounding Chinese blast furnace capacity utilization rates, which should result in the quicker drawdown of iron ore inventories at Chinese ports, are also expected to offer further price support, Widnell said.
Support for iron ore remained intact even as China’s state planner kept a close eye on market activities following the recent strong price rally.
The National Development and Reform Commission, which has warned against iron ore hoarding, market speculation and disinformation, on Monday reminded traders of regulators’ increased supervision of both spot and futures markets to ensure stable prices.
(With files from Reuters and Bloomberg)