Ore with 62 percent iron content at the Chinese port of Tianjin slumped 4.9 percent to $145.40 a dry metric ton, the biggest one-day decline since Nov. 28, 2011, according data from The Steel Index Ltd. It jumped since early September when the Asian country approved $158 billion in spending on projects from subways to sewers, helping to spur a rally in steel prices.
The surge in prices is an indication that China is stockpiling the raw material, Clarkson Plc (CKN), the world’s largest shipbroker, said yesterday. The nation’s coldest winter in 28 years curbed its domestic production of iron ore, according to a Jan. 10 report from Credit Suisse Group AG. Imports by the world’s largest buyer of cargoes rose to a record 70.94 million tons last month, customs data show.
“Mills had stocked up quite nicely over Christmas, hence the run up, and can now afford to be more selective,” Jos Evans, London-based head of ferrous options at SSY Futures Ltd., a freight and ore-derivatives brokerage, said by phone today. Steel prices are “weak,” there’s been an increase in the amount of ore being sold, and an easing in the cold snap will also help domestic supply, he said.
Steel Futures Slump
Iron-ore inventories at ports plunged 24 percent since the end of August to 72.91 million tons, within 3.4 percent of a more-than two-year low, according to researcher Beijing Antaike Information Development Co. China typically restocks in January before the lunar New Year, according to Kerry Deal, head of iron-ore and bulk derivatives at Jefferies Hong Kong Ltd.
Prices have dropped for five days in a row, the longest streak since Aug. 30.
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