By Emily Ou Yong
Iron ore futures fell on Friday, as record-high inventories at Chinese ports outweighed support from China's move to restrict the use of certain Fortescue ASX:FMG products.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) COMEX:TIO1! fell 0.51% to 736 yuan ($108.55) a metric ton by 0305 GMT, taking its weekly loss to 0.67%.
The benchmark August iron ore (SZZFQ6) on the Singapore Exchange was 0.51% lower at $97.75 a ton.
China's state-owned iron ore buyer, China Mineral Resources Group, has notified some mills verbally that from July 15 they must not take delivery of portside cargoes of Fortescue's Super Special Fines and Fortune Fines, both of which are lower-grade iron ore products.
Still, analysts at ANZ said any meaningful price recovery was unlikely because portside inventories in China were already near a record 160 million tons, citing consultancy Steelhome.
That leaves mills with ample supply and reduces the need to bid for seaborne cargoes.
Other steelmaking ingredients on the DCE rose, with coking coal NYMEX:ACT1! and coke (DCJcv1) up 1.34% and 1.65%, respectively.
Steel benchmarks on the Shanghai Futures Exchange broadly declined. Rebar SGX:RBF1! fell 0.29%, hot-rolled coil COMEX:EHR1! shed 0.4%, wire rod (SWRcv1) traded flat and stainless steel COMEX:HRC1! slipped 0.07%.
($1 = 6.7801 Chinese yuan)