Inventory soaring and production at Vale exceeding expectations intensifies supply concerns. Iron ore futures prices fall for the third consecutive time.

With the continuous increase in Chinese inventories and higher-than-expected production from Brazilian mining giant Vale S.A. Sponsored ADR (VALE.US), market concerns over oversupply have intensified, leading to a third consecutive day of price declines for iron ore. On Friday, iron ore futures fell by 1.7% to $97.90 per ton, and are expected to decline for a fifth consecutive week. If this holds true, it will be the longest consecutive decline since June. Data shows that iron and steel raw material inventories at Chinese ports increased by 0.5% from the previous week, reaching approximately 161 million tons. Inventories have been rising for eleven consecutive weeks, approaching historical highs. This accumulation of inventory marks a shift from the historically low inventory levels at Chinese ports, highlighting that supply growth has outpaced demand. Additionally, as the Lunar New Year holiday approaches next week, consumption is expected to slow down. Meanwhile, one of the world's largest mining companies, Vale S.A. Sponsored ADR, announced on Friday that its iron ore production for the last quarter was 90.4 million tons, exceeding analysts' expectations; annual production also exceeded guidance and surpassed competitor Rio Tinto plc Sponsored ADR. Increased supply from Australia and Brazil, combined with weak demand, continue to put pressure on iron ore prices. So far this year, iron ore prices have fallen by approximately 7%.