Iron ore price up as China port stocks hit over 8-month low

Iron ore prices rose on Monday supported by a decline in portside stockpiles in China.

Imported iron ore stocked at Chinese ports dropped for a fourth straight week to 123.95 million tonnes as of Friday, hitting the lowest level since early October, data from SteelHome consultancy showed.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $218.62 a tonne on Monday, up 0.9% from Friday’s closing.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange ended daytime trading 2.1% higher at 1,196 yuan ($185.31) a tonne, up for a fourth consecutive session. It earlier rose to 1,209.50 yuan, its strongest level since June 21.

“Weekly Australian iron ore shipments have been disappointing through June, creating a tighter global supply-demand balance – not to mention the revolving door of incidents in Brazil,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.

“Iron ore and steel prices are once again rising higher … amid strong demand from the Chinese steel industry and supply issues from the largest global producers,” market analyst Fitch Solutions wrote in a note.

However, an improvement in supply and weaker consumption by downstream players at current high prices are expected to cap gains in the coming months, Fitch added.

(With files from Reuters)