Iron ore stocks pile up at ports

As of the end of last week, there were 72.2 million tons of iron ore stocks at ports, up 1.85 million tons from a week before. China's imports of iron ore from India were up 280,000 tons from the previous week, those from Australia were up 800,000 tons and those from Brazil were up 570,000 tons.

An industry analyst said the accumulation of iron ore was the results of wide expectations early this year for a reviving future market. Steelmakers were buying iron ore for fear of a continued rise in the prices; iron ore distributors were also keen to replenish their stocks in the hope of the rise. But the evolution of the market has proved inconsistent with their early schemes. The growing pressure from finished steel inventory has forced some producers to temporarily cut output, which in turn quenched their thirst for iron ore.

As of July 14, the domestic steel prices continued to fall, making the iron ore market even cloudy. Iron ore prices at home were on a modest decline, so too were the imported materials. On July 9, the Baltic dry index plunged by 1.96 percent to 1,902 points, the lowest level since May 5, 2009.

The analyst said the cost pressure of iron ore would continue for a while as the steel prices maintained their downward trendline. There are no signs of early relief in their balance-sheets squeeze.