Chinese iron ore futures ticked higher as stockpiles at the country’s ports dropped for a third straight week, reflecting firm demand as buyers sought cheaper cargoes.
According to industry consultancy SteelHome which tracks inventory at 44 Chinese ports, Stockpiles of imported iron ore at China’s ports fell by 900,000 tonnes to 110.65 million tonnes. The port stocks, however, remain not too far below a record high of 113.7 million tonnes.
Commonwealth Bank of Australia said last week there needs to be a sharper decline in port inventory to outweigh the increase in supply and spur a stronger recovery in iron ore prices.
Iron ore for January delivery on the Dalian Commodity Exchange was up 0.2% at CNY 674 per tonne by midday, but still well below last week’s high of CNY 692.
An iron ore trader in Shanghai said that some mills are preferring to buy cargoes from the ports which are about USD 2 to USD 3 cheaper than new shipments. But some buyers are still facing tight credit conditions, from traders to mills, preventing them from buying shipments.
According to data compiled by Steel Index, iron ore for immediate delivery to China slipped 0.3% to USD 95.70 per tonne on Friday ending last week with a marginal gain.
Source – Reuters