Fortescue’s Super Special Fines iron ore stocks at China ports tumble to four-month low

Stocks of Fortescue’s Super Special Fines, a type of lower-grade iron ore, held at Chinese ports dropped 16.5% to a four-month low in the week to July 14, traders said, as steelmakers rushed to take delivery of cargoes before restrictions by Beijing kicked in.

China Mineral Resources Group (CMRG), the state iron ore buyer, notified domestic steel mills in early July that from July 15 they must not take delivery of Super Special Fines held at ports.

It later widened the restrictions to new purchases of Fortescue’s Super Special Fines cargoes, Bloomberg reported earlier this month.

Inventory of Super Special Fines at some major Chinese ports slumped by nearly 17% week-on-week to 6.01 million metric tons as of July 14, the lowest since mid-March, said three traders.

That represents the steepest weekly fall in nearly nine months, according to one of the traders, speaking on condition of anonymity due to the sensitivity of the matter.

CMRG is locked in talks with Fortescue on a new supply contract.

The restriction on portside cargoes escalates CMRG’s campaign to assert control over the giant iron ore market, following a months-long standoff with BHP that ended in April.

Fewer deliveries of Super Special Fines cargoes at Chinese ports partly due to a typhoon in China also contributed to the sharp inventory drawdown, an industry analyst said.

(Editing by Emelia Sithole-Matarise)