The iron ore price rose on Wednesday on hopes that the Russia-Ukraine conflict will boost demand for Chinese steel overseas.
The most active May iron ore contract on China’s Dalian Commodity Exchange surged as much as 5.9% to 764 yuan a tonne, the highest since February 15.
On the Singapore Exchange, iron ore’s front-month April contract jumped 1.9% to $150.90 a tonne.
Steel futures also climbed to the highest in more than two weeks.
Russia accounts for an estimated 10% of the global steel trade, while Ukraine has a 4% share, according to Huatai Futures analysts.
The supply interruption will force some major buyers to seek alternative sources, and “currently only China can fill this huge market vacancy”, they said in a note.
The most-active May contract for hot-rolled coil – steel used in car bodies and home appliances – on the Shanghai Futures Exchange rose 2.5% to 5,158 yuan ($817.08) a tonne, advancing for a third consecutive day to the highest since February 11.
Prospects for increased domestic steel demand also supported prices, analysts said, as China’s parliament begins its annual meeting on Saturday and is likely to unveil more stimulus to ease a growth slowdown.
Disruptions to iron ore exports from Russia and Ukraine have also reportedly prompted some European buyers to seek cargoes from other countries, potentially tightening global supplies.