SHANGHAI, June 7 -- Iron ore inventories at major Chinese ports rose 2.1 percent this week as falling steel prices prompted some mills to cut production and buy less of the raw material, researcher Mysteel.com said.
Stockpiles at 23 major ports, including Rizhao and Qingdao, increased by 1.43 million metric tons to 70 million tons from a week ago, Mysteel.com said today on its website.
Chinese steel prices have fallen 8.8 percent from an 18- month high on April 15 amid concerns government measures to curb speculation in the property market may trim demand. Baoshan Iron & Steel Co., the country's biggest publicly trader steelmaker, may cut automotive steel prices by 17 percent, the Shanghai Securities News reported today.
"Smaller mills continue to cut production, curbing demand for imported ore," Mysteel said in its weekly inventory report. "The market will remain weak over the short term. Most traders held off sales as bidding prices from the steelmakers were too low."
Rising stockpiles may lead steelmakers and traders in China, the biggest consumer of iron ore, to cut imports. The cost of 62 percent iron-content ore delivered to Tianjin port has fallen 21 percent to $147.20 a ton as of yesterday from $186.50 on April 21, according to The Steel Index.
Of the 150 blast furnaces in China's Tangshan city, Hebei province, 18 stopped producing in late May, affecting 8.5 percent of local production, Hu Yanping, an analyst at UC361.com, said June 2.
Inventories of steel products, including reinforcing bars used in construction, rose last month in China, Hebei Iron & Steel Co.'s Board Secretary Li Bohai said today in an online conference with investors. Stockpiles of hot-rolled and cold- rolled coil didn't increase, he said.
The Chinese government has limited loans for third-home purchases and tightened payment requirements, as it sought to cool a market where growth in property prices topped 10 percent for three months.
Brazilian ore stockpiles rose by 540,000 tons to 16.6 million tons, and Indian ore gained 400,000 tons to 18.49 million tons at Chinese ports, Mysteel said. Stockpiles of Australian ore remained unchanged at 21.97 million tons, it said.
Iron ore imports unloaded at Chinese ports rose 4.5 percent to 56 million tons in May from a month earlier, the Ministry of Transport said. They were 2.5 percent lower from a year ago.