China Iron-Ore Stocks at 4 1/2-Year High on Supply

By Alistair Holloway - Jan 24, 2011 3:57 PM GMT+0200

China, the world’s biggest user of iron ore, boosted stockpiles of the steelmaking material to the highest in at least 4 1/2 years last week on concern future supplies may be limited.

There were 80.1 million metric tons of iron ore held at ports monitored by Antaike Information Development Co. as of Jan. 21. That’s up 1.9 percent from the week before and the most for the data that go back to June 2006. China accounted for 44 percent of the world’s output of steel in November, according to World Steel Association data.

“Market players report of traders having built inventories in anticipation of tight supply going forward,” Wilhelm Gedde- Dahl, an Oslo-based analyst with Pareto Securities AS, wrote in a note today. A tropical low is moving toward Australia’s Pilbara coast and is expected to increase to cyclone strength late tomorrow or the following day, the country’s Bureau of Meteorology said on its website. BHP Billiton Ltd., Rio Tinto Group and Fortescue Metal Group mine iron ore in the region. Last month, Port Hedland, the world’s largest bulk-export terminal, suspended inbound shipments when the bureau forecast a tropical cyclone to develop.

Orissa, India’s largest iron-ore producing state, is considering banning exports to thwart illegal mining and increase local supplies. A decision is expected “soon,” after which federal approval will be sought, state Mines

Minister Raghunath Mohanty said on Jan. 21.

The eastern state exported about 20 million tons of iron ore last year, almost a third of India’s overseas shipments of the material. Karnataka, a state in India’s south, barred iron- ore exports in July.

The price of iron ore fines imported at China’s Tianjin port fell 0.4 percent today to $185 a ton, according to Steel Business Briefing. That’s the first decline since Dec. 30.

To contact the reporter on this story: Alistair Holloway in London ataholloway1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter atccarpenter2@bloomberg.net.