Iron ore price drops 4% to 3-month low

The benchmark CFR import price of 62% iron ore fines at China's Tianjin fell $6.10 or 4.4% on Thursday, continuing a sharp correction since hitting 16-month highs mid-February.

Iron ore was changing hands at $132.90 a tonne, a three-month, after losing ground seven days in a row.

The steelmaking raw material is still up over 50% up from three-year lows reached in September.

The pullback is being ascribed to the end of restocking by Chinese steel mills – the country's furnaces consume 60% of the global seaborne trade – and a fall in inventories at the country' ports.

Last week stockpiles at China's 30 biggest ports fell to 62 million tonnes, a fresh three -year low, and down from 100 million tonnes in February last year.

China's iron ore imports hit a record 743 million tonnes in 2012, but have now slowed considerably with February imports registering a 16% drop from a year ago and a 14% slide from January.

Growth in the second largest economy in the world has been driven by a construction boom, but new restrictions on property to stop local governments racking up debt and over-investing in the name of urbanization, are set to cool demand for raw materials.

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