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UPDATE 1-China iron ore posts worst week in five as port stocks climb
March 10, 2017 / 7:28 AM / 6 months ago

UPDATE 1-China iron ore posts worst week in five as port stocks climb

* Dalian iron ore fell 3.2 pct this week

* Iron ore stocks at Chinese ports highest since at least 2004

* Spot iron ore on track for steepest weekly decline since Nov (Updates prices)

By Manolo Serapio Jr

MANILA, March 10 (Reuters) - Iron ore futures in China ticked up on Friday, but still posted their biggest weekly drop in five as a rally in steel prices lost steam and stockpiles of iron ore at Chinese ports rose to the highest in at least 13 years.

Iron ore prices have rallied with steel this year despite a sustained increase in stocks of imported ore at China’s ports. But as steel prices pulled back, concerns emerged in the market over the growing mountain of the steelmaking raw material that could increase further.

The most-traded iron ore on the Dalian Commodity Exchange closed up 0.3 percent at 656 yuan ($95) a tonne. The contract, which touched a record high of 741.50 yuan last month, lost 3.2 percent this week, matching a decline during the week ended Feb. 3.

The most-active rebar on the Shanghai Futures Exchange ended 0.4 percent higher at 3,402 yuan per tonne. The construction steel has dropped nearly 7 percent since scaling a three-year high on Feb. 27.

Stockpiles of iron ore at major Chinese ports reached 130.05 million tonnes as of March 3, SteelHome said, the most since 2004 when the consultancy began tracking the data. SH-TOT-IRONINV>

The continued inventory buildup shows Chinese “demand is failing to consume the surplus volumes,” UK steel consultancy MEPS said in a note.

“With reduced export opportunities, as a result of trade actions in various countries, China now looks to its own domestic market and its investment in infrastructure to consume the oversupply,” it said.

China’s steel exports fell to a three-year low of 5.75 million tonnes in February.

As iron ore futures slid this week, so did spot prices with deals slow in physical markets, traders said.

Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB fell 0.5 percent to $86.79 a tonne on Thursday, the lowest since Feb. 10, according to Metal Bulletin.

The spot benchmark was down 5 percent so far this week, on course for its biggest such loss since mid-November.

$1 = 6.9135 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Subhranshu Sahu

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