FX.co ★ Iron Ore Slips on Record-High Inventories in China

Iron ore futures fell below CNY 740 per ton, moving back toward one-year lows after an industry report showed inventories at Chinese ports had risen to a record 160 million tons. The abundant stockpiles have alleviated supply concerns among steel mills, diminishing their need to procure additional seaborne cargoes.

This bearish inventory data overshadowed China’s move earlier in the week to restrict deliveries of certain Fortescue products to selected domestic steelmakers, a measure that could otherwise tighten local supply. According to reports, China Mineral Resources Group has instructed mills and traders holding Fortescue’s Super Special Fines to take delivery by July 15, after which the blast furnace feedstock will be placed on a blacklist.

If enforced, this measure would represent a significant escalation in the standoff, with negotiations over long-term supply agreements between the Australian miner and CMRG still deadlocked.