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Iron ore under pressure as China's port stocks highest in a year

Published 06/04/2016, 01:14 pm
Updated 06/04/2016, 01:20 pm
© Reuters.  Iron ore under pressure as China's port stocks highest in a year

* Weaker iron ore futures in China, Singapore

* Iron ore stocks at China's ports at 97 million tonnes

* Shanghai rebar steadies below multi-month high

By Manolo Serapio Jr

MANILA, April 6 (Reuters) - Iron ore futures in Asia slipped on Wednesday, under pressure from rising supply that has lifted stockpiles at Chinese ports to the highest in a year and could further drag down prices of the steelmaking commodity after last quarter's rally.

Trading activity in the physical iron ore market was limited, traders say, after recent stockpiling by Chinese buyers looking to a seasonal pickup in steel demand.

The most-traded September iron ore on the Dalian Commodity Exchange DCIOcv1 was down 0.5 percent at 376.50 yuan ($58) a tonne by 0253 GMT. On the Singapore Exchange, May iron ore SZZFK6 dropped 0.7 percent to $50.80 a tonne.

"Seaborne iron ore supply is increasing and we may see higher Chinese port stocks in coming weeks," analysts at investment bank ANZ said in a note.

Iron ore exports from Australia's Port Hedland, the biggest port for the raw material, rose to a record 39.5 million tonnes in March. Shipments to top market China reached 32.59 million tonnes from 29.14 million tonnes in February. Chinese demand for iron ore firms, the increased flow of cargoes to China could be stocked at the country's ports.

Inventory of imported ore at China's major ports stood at 97 million tonnes as of April 1, the highest since late April 2015, based on data tracked by consultancy SteelHome. SH-TOT-IRONINV

Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI was unchanged at $54 a tonne for a second straight day on Tuesday, according to The Steel Index, on limited trading activity even as China returned from a public holiday on Monday.

The spot benchmark rose 24 percent in January-March, marking its best quarter since October-December 2012 and outpacing gains in other commodities including gold and zinc.

On the Shanghai Futures Exchange, construction-used rebar SRBcv1 was little changed at 2,182 yuan a tonne, below a nine-month peak of 2,240 yuan reached on March 23. ($1 = 6.4753 Chinese yuan)

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