Chinese stockpiling as tensions simmer

Increasing Chinese iron ore inventories in the June Quarter could be a result of simmering tensions between China Iron and Steel Association (CISA) and Rio Tinto over contract price negotiations, according to Resource Capital Research (RCR) iron ore analyst Dr Trent Allen.

Increasing Chinese iron ore inventories in the June Quarter could be a result of simmering tensions between China Iron and Steel Association (CISA) and Rio Tinto over contract price negotiations, according to Resource Capital Research (RCR) iron ore analyst Dr Trent Allen.

RCR yesterday released the July Iron Ore Company Review, reporting a drop in the price of steel products and iron ore from 2008 levels (steel 22-55%, iron ore import fines to China by 65%).

“In terms of the iron ore price, recent contract settlements fell below long-term trends,” Allen said.

“A return to USc 100-130/dmtu (US$62-80/t) for fines could occur in the next three years.”

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