BHP's China Jimblebar ore stocks hit five-month low after ban removal
Portside inventories of BHP's Jimblebar fines, a type of iron-ore, in China slid to a five-month low after Beijing ended a months long dispute with the global miner, but the drawdown has not weighed on prices.
The world's largest iron ore consumer in late April removed its ban on purchases of certain BHP ore products including the Jimblebar fines that had piled up at ports, raising expectations portside stocks of the brand would be drawn down rapidly and weigh on prices of the key steelmaking ingredient.
Analysts had mixed views on whether the drawdown was in line with normal levels or was slower than expected.
Stocks of Jimblebar fines, one of BHP's flagship products at 15 major Chinese ports fell 3.1% from late April to 8.42-million tons as of May 12, the lowest level since late December, said three traders with knowledge of the matter.
That said, the current inventory of the iron ore brand was still nearly five times higher than last September.
"Some steel mills had switched to the usage of other iron ore products and they need to readjust their 'menu' for blended furnaces feedstock before buying more Jimblebar fines," said one analyst on condition of anonymity given the sensitivity of the matter.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) was at 812 yuan ($119.64) per metric ton by 0314 GMT, a rise of 2.3% from late April.
In mid-April, China removed a ban on procurement of BHP's seaborne cargoes following a visit by the miner's top executives.
Last September, China's state iron-ore buyer banned purchases of BHP's Jimblebar fines, followed by the miner's Jinbao fines last November and Newman fines in March.
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