http://www.theaustralian.com.au/business
CHINA is building up its iron ore stockpiles to take advantage of the commodity’s weak prices despite deliberately slowing steel production over the past month.
New figures released by Xinhua-China Iron Ore Price Index showed stockpiles of imported iron ore at 33 major Chinese ports surged 1.44 per cent last week compared with a week earlier due to weak demand.
Iron ore inventories at the 33 ports across China rose by 1.47 million tonnes to 103.44 million tonnes, one of the highest levels in the past year. Most Australian imported iron ore is stored at the Tianjin port, south of Beijing, the largest in China.
The Xinhua report said a slowing economy and mounting environmental pressure was hurting the profit margin of the steel industry, softening demand for iron ore.
China has slowed production and output in the Hebei region, the steel capital of China, in a bid to reduce pollution during the Asia-Pacific Economic Co-operation leaders’ meeting, which begins today in Beijing.
Production at more than 100 plants in the province has been shut down to ensure there are blue skies in the capital when the world’s political and economic leaders arrive.
The move, along with uncertainty over China’s future economic growth and worries about the its steel industry, has created major volatility in the iron ore price over the past few months.
The commodity is now trading down 44 per cent this year and Morgan Stanley last week forecast iron ore could head to $US70 a tonne by the end of December.
The investment bank said the price could be further pressured by Chinese steel mills experiencing trouble accessing finance.
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