China’s inventories of iron ore at ports have hit all-time record highs recently of approx. 130Mt. This is a record high both in levels and in days of supply terms. Yet the market currently appears comfortable with this.
Low grade inventory has risen solidly over the last 12 months. While precise numbers are hard to verify, we understand that lower grade inventory (50%-60% Fe) has risen from ~35% of total port stocks at the start of 2016 to ~45% of total port stocks now.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
