ore piling up in china..not good

Chinese traders fear repeat of 2008 as ore piles up
Peter Cai June 4, 2012

MOUNTAINS of iron ore at Chinese ports used to be a sign of a booming Australian resources industry - but now it has turned into a source of headaches for Chinese commodity traders, who are struggling to find buyers for their stockpiles of red dirt.

Port of Qingdao, in the country's north, is one of the largest iron ore ports in China and is responsible for 14 per cent of all the country's imports. It has ran out of space to take in more goods. At its peak, thousands of trucks and dozens of trains were used transport iron ore to hundreds of steel mills in China.

But the number of trucks and trains has declined. Restaurant owners near the port and truck drivers have felt the impact most acutely.

The stockpile of ore is estimated to have reached 15 million tonnes and continues growing.

One truck driver said: ''This year's business is far worse than last year; hardly any business. Though the number of ships carrying ore has hardly reduced, people transporting these goods have reduced greatly,'' he told Southern Weekend, a newspaper based in the Chinese city of Guangzhou. A senior steel executive from Shandong told the newspaper: ''Most of the steel mills are only maintaining a minimum level of production.''

The reported stockpiling came as Fortescue Metals chief executive Neville Power yesterday warned that iron ore prices would fall 19 per cent before finding a ''long-term, sustainable'' level in China.

''Looking forward, we've allowed the forecast to drop down to around $US110 a tonne.

One banking executive from Tanshan, the largest steel production centre in China, yesterday told.


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