Iron ore prices rise amidst increased portside stocks and growing steel production

Iron ore prices ended back over $US120 a tonne in Asian dealings on Friday as the market ignored another rise in portside stocks in the week to Thursday.

That was a gain of around $US3 a tonne at the close, reaching $120.60 – the third time the price has been over $US120 a tonne in the past week or so.

Data from the Mysteel website showed that stocks grew by nearly half a million tonnes to reach 148.6 million tonnes at China’s 45 major ports as of May 23.

Thursday’s figure was up a high 18% over the year and came after a 7 million tonne increase the previous week.

Meanwhile, demand for the most important steel product – rebar, or reinforcing steel bars – picked up last week, hinting at improved demand from building and construction.

Production among the 137 Chinese steelmakers rose for a second week to hit a four-month high of 2.36 million tonnes.

However, output was still 12.8% lower than the corresponding period last year, reflecting the downturn in demand from the property sector in particular.

It’s only a small thing, but the frailty of demand from the construction and building sector is a big deal as far as the wider Chinese economy is concerned. Rebar demand, sales, and consumption are as closely watched by economists as any other figure.