After a month long rally of 17%culminating in the highest level in the last 5 months the buck finally stopped on the eve of New Year in China.Propped on sound macro economic parameters steel production picked up.Steel consumption has shown encouraging signs with infrastructure projects being implemented.
Steel mills ever eager to surge production have been de-stocking inventory pile at the port amidst uncertainties in prices.Iron ore inventories at China's main ports hit a two-year low touching 73.81 million tonne.
Price levels have touched USD 135 per tonne,for Fe 63.5/63%has remained stable through the week indicating pause if not peaking.Cold weather will continue to hit steel demand with most of the Northern China being frozen.However tight supply and high steel output may support iron ore.
Optimism is rife that steel mills need to restock before the week-long Lunar New Year in early February.