Iron-ore prices rose on Friday as China’s expanded restrictions on buying seaborne cargoes from BHP sparked supply concerns, outweighing declining demand. Analysts caution that extended curbs could disrupt global supply chains and increase price volatility, impacting steel production worldwide.
China’s Dalian Commodity Exchange iron-ore contract closed 1.38% higher at 772 yuan ($111.90) per ton, up 2.54% this week. Singapore’s benchmark iron-ore futures gained 1.53% to $101.55 a ton, rising 3.24% for the week; both contracts hit one-month highs.
China’s state-run iron-ore buyer asked traders to reduce purchases of BHP’s flagship products due to an ongoing contract dispute, following earlier bans on other BHP fines. Traders fear limited availability, as BHP is a major global supplier.
Despite supply worries, gains were capped by reduced demand amid continued steel mill restrictions in North China, with daily hot metal output down 2.4% to 2.28-million tons, the lowest since December. China’s pledge to address steel overcapacity may further dampen feedstock demand.