Benchmark iron ore futures closed down 3.1% to 681 yuan ($107.8) a tonne on Friday and logged the fourth straight weekly decline.
“There are concerns that the Ukraine-Russia tension could worsen relations between China and the United States, which might hurt steel products exports,” said Cheng Peng, an analyst with SinoSteel Futures.
Meanwhile, Huatai Futures analysts in a note said that the recovery in steel consumption in China had been slow and below market expectations, adding that demand optimism is easing.
Vale executives said on Friday that Russia’s invasion of Ukraine is expected to influence the price of iron ore pellets, as both countries together account for about 30% of the 120 million tonnes global market.
Ukrainian miner Ferrexpo Plc alone makes up 4% of pellet supply, according to Bloomberg Intelligence, and is suffering rail disruptions.
“The big question is how long this tension will last,” Marcello Spinelli, Vale’s head of iron ore, told analysts on a call Friday.
($1 = 6.3127 Chinese yuan renminbi)
(With files from Reuters)
