Iron ore prices…have recovered from two weeks of Chinese...

Iron ore prices…have recovered from two weeks of Chinese intervention in the spot market to return to around US$140/t in recent days.

Singapore futures for April were up 4.07% to US$147.70 yesterday.Where the biggest impact could be felt is in the high grade segment of the market.

Vale EVP of investor relations Marcello Spinelli said on an earnings call on Friday the 25Mt of high-grade pellets produced in Russia and Ukraine comprised about 30% of that market. Ferrexpo has already called Force Majeure.At 11.2Mt, the Ukrainian miner is the third largest producer of pellets in the world behind Vale and Sweden’s LKAB.

“My first reaction is that we don’t have extra supply to support a shortage … coming from this region. And the first impact will probably be in the pellet premium,” Vale’s Spinelli said.“We’ve been hearing and receiving calls from our clients in Europe, in the East Europe to support them … we are trying to arrange our supply chain to help them, but there is a limited action for the shortage in short term.”