HANOI: 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% lower at 768.50 yuan ($106.06) per metric ton at the midday break. Still, the contract was up 2.9% for the week. The benchmark December iron ore on the Singapore Exchange was 1.3% lower at $100.70 a ton as of 0507 GMT.

It is up 5.5% 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. Other steelmaking ingredients on the DCE fell, with coking coal down 0.5% at 1,285 yuan a ton, and coke falling 1.8% to 1,901.50 yuan. Steel benchmarks on the Shanghai Futures Exchange (SHFE) were also down.

SHFE rebar slid 1.4% to 3,279 yuan a ton, hot-rolled coil dropped 1.2% to 3,452 yuan, wire rod decreased 1.1% to 3,578 yuan, and stainless steel shed 1.1% to 13,195 yuan.