FX.co ★ Iron stockpiles at Chinese ports rise to record high

According to Shanghai Steelhome E-Commerce Co., iron ore stockpiles at China’s ports hit record high. Bloomberg reported that stockpiles rose by 1.3% to 136 million metric tons. So far in 2017, they have grown by 22.05 million tons from a 20.85 million increase a year before.

“We expect a greater preference for lower-quality ores in the coming months, and that should begin the reduction in iron ore inventories,” analyst at Barclays Plc. Dane Davis said. While it remains possible that port holdings may rise to 150 million tons this year, he said.

Iron ore price has stabilized above $60 per ton in recent weeks after falling in March and April on concerns over overproduction. On Friday, May 19, the raw material with 62 percent content in China’s Qingdao traded at $63.19 per ton.

Iron ore futures for September delivery rose by 1% on the Dalian Commodity Exchange today to 494 yuan per ton.

At the same time, steel for October delivery rose by 3% to 3,342 yuan per ton on the Shanghai Futures Exchange, posting a 2-month high after rising for six sessions in a row. Stockpiles are falling after the price decline, having reached the lowest level since December.