Iron ore futures in China dropped for a fourth session in a row on Tuesday amid record stockpiles of the steelmaking ingredient at the country's ports while winter steel demand was slow. Stockpiles of imported iron ore at China's major ports reached 152.83 million tonnes on January 12, up 2 million tonnes from the previous week, data compiled by SteelHome consultancy showed.
That was the biggest port inventory since 2004 when SteelHome began tracking the data. The stocks increased 30 percent last year. "A combination of a harsh winter in China and plentiful inventories at the ports is reducing traders' appetite in the spot physical market," ANZ analysts said in a note.
The most-active iron ore contract for May delivery on the Dalian Commodity Exchange closed down 1.6 percent at 529.50 yuan ($82) a tonne, surrendering early modest gains and adding to Monday's 2-percent slide. The slide in Chinese futures on Monday dragged down spot iron ore prices, with the benchmark 62-percent grade material for delivery to China's Qingdao port falling 1.9 percent to $76.59 a tonne, according to Metal Bulletin.
At a tender on Monday, a 170,000-tonne cargo of 61-percent grade Pilbara Blend iron ore fines was sold at $75.66 per tonne, compared with the last trade for the same grade at $77.10 on Friday, Metal Bulletin said. The 62-percent spot benchmark touched $79.08 on January 11, the highest since August 22.
Meanwhile, Rio Tinto , the world's No 2 iron ore supplier, said it could ship up to an additional 10 million tonnes of the commodity in 2018, after reporting a 1 percent increase in output last year to 330.1 million tonnes. Also on Tuesday, the most-traded coking coal contract on Dalian slid 4 percent to 1,277.50 yuan a tonne and coke lost 1.5 percent to 1,959.50 yuan.
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