A three-month high for iron ore prices was reached on Wednesday as traders remained bullish about the prospects for China's aid packages for the country's loss-making property sector.
Iron ore futures hit an over three-month high in China and Singapore as optimistic investors bet on a bounce in demand from the property support moves last week, despite another rise in portside stocks to more than 147 million tonnes – the highest in two years or more.
The most traded September iron ore contract on China's Dalian Commodity Exchange (DCE) was up 2.5% to 919 yuan ($US126.95), its highest since late February. Meanwhile, the price of 62% fines on the SGX platform in Singapore closed at $US121.60 a tonne, also the highest since late February.
Iron ore stocks at the 45 major Chinese ports surveyed by Mysteel stood at 147.4 million tonnes late last week, up 6% from the beginning of March.
The rise in stocks (and continuing high levels of iron ore imports above 100 million tonnes for March and April) came as production data showed China's iron ore mining industry slowed sharply in April.
China produced 87.9 million tonnes of iron ore in April, up by 17% compared to the previous year but down 10% from March. This left production for the first four months of the year up 14% at 368.87 million tonnes.
