Top miners raise iron ore supplies, drag prices down
This has reinforced fears that the 37% gain in commodity prices since September may be undermined in the coming weeks by a supply glut and a fragile recovery in the Chinese steel demand.
The miners are offering around 600,000 tonnes of iron ore in spot tenders closing Tuesday, at least 10% more than the usual volumes witnessed recently, traders said.
The December swap contract at the Singapore Exchange declined to $115.50 per tonne in early trade, after shedding more than a dollar to $115.72 on Monday, suggesting the prices may dip further. The benchmark ore, with a 62% iron content, dropped 1.2% to $122.25 a tonne, its lowest since November 6.
Iron ore prices started creeping up since September as Chinese steel mills began building inventories expecting the world's biggest metal player to announce some kind of stimulus — in tune with the ones declared recently by the US Federal Reserve, the European Central Bank or Bank Of Japan — to spur growth after a leadership transition in early November.
However, although Beijing has named its next leaders, it hasn't yet hinted at any significant policy steps. Miners are worried a rise in October housing inflation would discourage China from announcing any easing measures, and are trying to offload as much as they can
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