UPDATE 1-China's iron ore stocks steady, congestion worsens

Published: 13 Apr 2009 21:54:23 PST

* Iron ore stocks steady at major ports, 72.45 million tonnes

* Increase in imports, stocks reflects concentrated purchases (Adds comments)

SHANGHAI, April 14 - Iron ore stocks at China's major ports held steady at 72.45 million tonnes in the week to April 10, Chinica Shipbrokers Ltd said in a report, as a result of the concentrated imports in the first quarter of this year.

China's customs authority said last week that the country's March iron ore imports reached an all-time peak of 52 million tonnes, up 46 percent from a year earlier and sharpening the oversupply facing the world's biggest steel industry.

The iron ore stockpiles in the ports rose by more than 10 million tonnes in the past month, suggesting that nearly one-fifth of March iron ore imports remained stuck at port warehouses rather than heading into blast furnaces.

"The increase in both imports and inventories reflects concentrated purchases in the past two months," said Macquarie Bank's analyst Henry Liu, "Merchants and steel mills might overstate the steel production and the ore demand."

In another development, port congestion in a major hub has worsened as heavy stockpiles hindered railway transportation, a manager at a state-owned shipping firm said, leaving vessels to wait as long as two weeks for discharging.

Iron stocks at China's largest iron ore port Qingdao remained unchanged from a week earlier, while the inventories in rival Rizhao Port fell 300,000 tonnes. But waiting time at Qingdao has risen to 12 to 13 days, from 6 to 7 days previously, Chinica said.

China's steel mills are still locked in annual price negotiations with the world's top iron ore miners, including BHP Billiton, Rio Tinto and Vale.

A government official said on Monday that mounting inflows were due to "fake demand" brought about by stockpiling and were likely to fall off over the rest of the year.

Here is a table of iron ore stocks:

STOCKS CHANGE ON WEEK

MLN TONNES TONNES PCT CHANGE APRIL 10 72.45 -100,000 -0.1 APRIL 3 72.55 1,033,000 1 MARCH 27 71.52 1,980,000 3 MARCH 20 69.54 1,053,000 2 MARCH 13 64.52 1,994,000 3 MARCH 6 62.53 3,397,000 6 FEB 27 59.13 827,000 1 FEB 19 58.30 174,000 0.3 FEB 13 58.13 -2,028,000 -3 FEB 6 60.16 210,000 0.4 JAN 23 59.95 -1,214,000 -2 JAN 16 61.16 -648,000 -1 JAN 9 61.81 -812,000 -1 DEC 26 62.62 310,000 0.5