Iron ore futures fell on Friday amid risk-off sentiment across the financial markets due to the intensifying Ukraine-Russia conflict, but they were on track for a weekly gain on solid demand.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) traded 1.2 percent lower at 768.50 yuan ($106.06) per metric ton at the midday break. Still, the contract was up 2.9 percent for the week.
The benchmark December iron ore on the Singapore Exchange was 1.3 percent lower at $100.70 a ton. It is up 5.5 percent for the week so far.
“(China’s) Daily hot metal output has been stable and at a high level … which means iron ore consumption remains strong even into the winter off-peak season,” said a trader.
“Second, there’s winter restocking now for mills as evident by inventories held climbing,” the trader added.
“We believe that the counter-cyclical rise in Chinese steel production seen in recent weeks could be a sign of front-loading manufacturing and exports ahead of potential US tariffs next year,” said Goldman Sachs analysts in a note.
However, risk-off sentiment across financial markets due to the rising conflict in the Ukraine-Russia war weighed on prices.
Russia fired a hypersonic intermediate-range ballistic missile at the Ukrainian city of Dnipro on Thursday, further escalating the 33-month-old war. Potential threats from possible tariffs on Chinese products could also dampen metals demand next year.
