Iron ore stockpiles in China, the world’s biggest buyer, climbed to a record as traders increased imports to use the steel-making raw material as collateral for credit and domestic demand remained weak.
Inventories at ports were 100.25 million metric tons last week, exceeding 100 million tons for the first time since July 2012, according to data from Shanghai Steelhome Information Technology Co. Reserves increased 16 percent in 2014.
Spot prices in China dropped 8.2 percent this year even as imports surged to a record last month. The increase in inventory levels creates near-term downside risk to iron ore prices, Goldman Sachs Group Inc. said in a Feb. 11 report. Money-market rates have also increased. The seven-day repurchase rate, a gauge of interbank funding availability in China, in December climbed to the highest since a record liquidity squeeze in June.
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