Missile strikes on Ukraine's energy infrastructure have led to severe power shortages, disrupting mining and processing operations. This has sharply decreased the supply of raw materials available for export. High shipping costs have forced a near halt to deep-sea pellet shipments, redirecting most exports to Eastern Europe. Suppliers, facing tight margins, are avoiding discounts. China's strong demand for Ukrainian concentrate remains steady, with buyers willing to take any volume without conditions, unlike their European counterparts, who are less active and often seek lower prices.
Russian iron ore continues to be sold to China at a discount of $5-8 per ton below global benchmarks. Far Eastern mining operations rely heavily on Chinese buyers due to their geographic position, leading to deals typically being accepted on offered terms. Suppliers in central Russia are seeking to avoid these low-margin transactions. With sanctions preventing direct shipments to the EU and limiting access to European transport infrastructure, Russian companies are boosting domestic sales and rerouting some exports through Russian ports. However, these ports face congestion and logistical challenges.
Ukraine’s Fe 63-66% pellets are around $120/t DAP Eastern Europe
Russian pellets are around $110-115/t FOB Black Sea
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