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SHANGHAI: Iron ore futures slipped on Friday, as rising portside inventory of the steelmaking ingredient in top steel producer China, along with weak demand, signalled prices could further weaken in 2022.

Iron ore for May delivery on China’s Dalian Commodity Exchange ended daytime trade 0.7% lower at 639.50 yuan ($100.46) a tonne.

The benchmark contract, however, was on course for its third straight weekly rise, supported earlier this week by optimism about China’s stimulus measures to bolster its economic growth and policy support for its debt-saddled property developers.

Iron ore’s most-active January contract on the Singapore Exchange was down 0.5% at $108.55 a tonne, as of 0737 GMT.

“The iron ore port inventories build through recent weeks is a bearish signal and they are expected to continue to lift over the next 2-3 months as pig iron production is not likely to pick up until after the (Beijing) Winter Olympics,” Westpac senior economist Justin Smirk said in a note.

Imported iron ore stocked at Chinese ports reached 155.4 million tonnes last week, the highest since July 2018, according to SteelHome consultancy data.

While falling steel inventories in China may signal an improvement in downstream demand, Smirk said current levels were still at a five-year high, suggesting “it has a long way to go before it signals a tight market”.

Iron ore prices could hit $75 a tonne by end-2022, he said, as tight steel production controls to curb emissions in China are likely to remain in place.

Spot iron ore in China traded at $109 a tonne on Thursday, up 4.3% from last week, but 53% off its record peak scaled in May, based on SteelHome data.

Construction steel rebar on the Shanghai Futures Exchange shed 0.3%, while hot-rolled coil lost 1%. Stainless steel fell 0.5%.

Dalian coking coal tumbled 6.1% while coke slumped 1%.

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