No, things are not getting better, and they’re going to get a whole lot worse. From Jasmine Ng at bloomberg.com:
Holdings at ports may top 100 million tons in 2016, Maike says
Reserves increase for fourth straight month as supply rises
Iron ore stockpiles at ports in China are heading into 2016 at the highest level in more than seven months as expanding low-cost supplies and sputtering demand in the biggest buyer spur concern that a glut will persist, hurting prices.
“Stockpiles have been on the rise because domestic demand is getting weaker and shipments from the major producers have increased,” Dang Man, an analyst at Maike Futures Co. in Xi’an, said by phone on Monday. Mills have “been cutting production, which reduces demand for iron ore. So a lot of the stocks have remained at ports.”
Holdings rose 0.8 percent to 93.1 million metric tons last week in the final reading of 2015, according to Shanghai Steelhome Information Technology Co. The inventories are at the highest since May after expanding for four months.
Iron ore breached $40 a ton this month, hurt by surging low-cost supply from producers including BHP Billiton Ltd., Rio Tinto Group and Vale SA, weaker consumption and rising stockpiles. Mills in the country that supplies half the world’s steel reined in output as product prices sank and the onset of winter curbed demand already hurt by a cooling economy. Port holdings expanded 13 percent this quarter, the biggest gain since the first three months of 2014.
“Inventories will continue to rise in 2016,” Dang said, forecasting that the holdings will probably climb back above 100 million tons. It won’t be a continuous increase because some high-cost mines will halt shipments, but the rising trend will persist, she said.
Iron ore has lost 27 percent this quarter and prices are set to cap a third annual decline, according to Metal Bulletin Ltd. Ore with 62 percent content delivered to Qingdao — which bottomed at $38.30 a dry ton this month, a record in daily price data dating back to May 2009 — was at $41 on Thursday.
To continue reading: Iron Ore Holdings Swell at China’s Ports