Iron ore prices rise on falling inventories

Import prices of iron ore continued to rise last week, with mills replenishing stocks amid a tentative rebound in the steel sector, according to Xinhua's latest iron ore price report released Tuesday. The price index for 63.5-percent-grade iron ore imports increased six points to 137 points during the week ending on Dec. 24, while the index for 58-percent-grade imports also climbed six points to stand at 118 points, according to the report. Positive November economic data and expectations that the new Chinese leadership will boost growth helped lift the flagging steel industry, prompting mills to restock iron ore and supporting prices of the steelmaking ingredient. Xinhua analysts said in the report that the rapid increase in iron ore prices was mainly due to a big drawdown in port inventories. The report showed that inventories of imported iron ore at 25 major Chinese ports stood at 80.3 million tonnes during the period, down 2.41 million tonnes, or 2.91 percent, from a week earlier. However, analysts said fundamentals in the steel sector have not been improving, as demand has remained soft. "The recent pickup in the steel sector may not bring about a prolonged boost for iron ore prices. With the cold weather, import prices of iron ore are expected to stabilize next week," according to analysts.