China iron ore port inventory decline slowed as high prices, tight availability muted trades

SHANGHAI, May 15 (SMM) – Inventories of seaborne iron ore at Chinese ports fell slower this week, as higher prices and tight availability of some products muted spot trades.

SMM data showed that iron ore stocks across 35 Chinese ports decreased 1.18 million mt in the week ended May 15 to 101.79 million mt, some 21.89 million mt lower than a year ago. This week’s decline almost halved from the previous week’s 2.29 million mt.

Daily average iron ore deliveries from the 35 ports fell 110,000 mt from the prior week to 2.77 million mt this week, as steel mills continued to restock as needed amid higher prices and as limited amounts of mainstream ore were available for sale at some ports.

Deliveries from the port of Jingtang, one of the two major ports in the top steelmaking hub of Tangshan, rose this week as some mills stepped up purchases after their stockpiles were depleted to low levels and on concerns over possible transport restrictions in the run-up to the political meetings.

China’s iron ore port stocks are unlikely to turn around to rise significantly in the short term.    

The most traded iron ore contract on the Dalian Commodity Exchange for September delivery surged nearly 3% to a peak for this year at 664.5 yuan/mt on Friday and is on track for the third consecutive weekly gain. The gains in spot prices were more moderate this week.