Iron ore price highest since July as China cranks out 16% more steel and stockpiles hit 2-year low

Benchmark 62% iron ore at China's Tianjin port added another 1.2% on Tuesday to $124.90 a tonne, the highest price since July 20 according to data from Steelindex and up 8.3% in December alone.

The price was boosted by news from China's National Bureau of Statistics that the country's steel products output climbed to 81.2 million tonnes in November – up 16.5% compared to last year and up 7.2% to 870.4 million tonnes during the first 11 months of 2012.

At the same time inventories of iron ore at the country's ports fell to 75.5 million tonnes – the lowest level in two years.

After hitting a peak above 100 million tonnes in February iron ore stockpiles remained steady until September.

Then with the price hitting a three-year low of $87.50 taking many domestic producers out of the market, China's steelmakers, suffering from a collapse in profitability,  started delving into stocks.

Imports have also been rising with China’s November  imports rising 17% to 65.8 million tonnes from the previous month to their highest in almost two years, according to customs data issued on Monday.

Total imports over the first 11 months of the year were 672.9 million tonnes, up 8% when compared to 2011.

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