January 16, 2018 / 2:28 AM / 4 months ago

Dalian iron ore edges up after slide, but bloated stocks weigh

* Iron ore inventory at China’s ports is largest since 2004

* Rio Tinto eyes modest hike in 2018 iron ore shipments

By Manolo Serapio Jr

MANILA, Jan 16 (Reuters) - Iron ore futures in China ticked up on Tuesday after dropping 2 percent in the previous session, but record stockpiles of the steelmaking ingredient at the country’s ports kept a lid on price gains.

Stockpiles of imported iron ore at China’s major ports reached 152.83 million tonnes on Jan. 12, up 2 million tonnes from the previous week, data compiled by SteelHome consultancy showed. SH-TOT-IRONINV

That was the biggest port inventory since 2004 when SteelHome began tracking the data. The stocks increased 30 percent last year.

“A combination of a harsh winter in China and plentiful inventories at the ports is reducing traders’ appetite in the spot physical market,” ANZ analysts said in a note.

The most-active iron ore contract for May delivery on the Dalian Commodity Exchange was up 0.6 percent at 541 yuan ($84) a tonne by 0213 GMT.

The slide in Chinese futures on Monday dragged down spot iron ore prices, with the benchmark 62-percent grade material for delivery to China’s Qingdao port .IO62-CNO=MB falling 1.9 percent to $76.59 a tonne, according to Metal Bulletin.

At a tender on Monday, a 170,000-tonne cargo of 61-percent grade Pilbara Blend iron ore fines was sold at $75.66 per tonne, compared with the last trade for the same grade at $77.10 on Friday, Metal Bulletin said.

The 62-percent spot benchmark touched $79.08 on Jan. 11, the highest since Aug. 22.

Meanwhile, Rio Tinto , the world’s No. 2 iron ore supplier, said it could ship up to an additional 10 million tonnes of the commodity in 2018, after reporting a 1 percent increase in output last year to 330.1 million tonnes.

Also on Tuesday, the most-traded rebar on the Shanghai Futures Exchange rose 0.6 percent to 3,805 yuan a tonne. Coke gained 0.3 percent to 1,994 yuan per tonne and coking coal slipped 0.2 percent to 1,327.50 yuan.

$1 = 6.4350 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Joseph Radford

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