Iron ore prices have been disrupted by speculative capital flows and have seen "excessive gains", according to officials at the company known as Baosteel, speaking during a conference call on Tuesday.
Both benchmark iron-ore futures on the Dalian Commodity Exchange and spot cargoes of iron-ore with 62% iron content surged more than 20% in the first 11 days of May alone, with prices up around 50% so far this year.
Baosteel said the company keeps iron ore inventories within a certain range, with an undisclosed upper limit - which it has reached in the first quarter - and a lower limit some two-million tonnes below.
It will keep inventories at the lower end of the range in the second quarter, officials said, bearing in mind the prospect of a drop in iron-ore prices.
Baosteel, which typically consumes 6.5-million to 7-million tonnes of iron-ore per month, said it currently has less than two months worth of ore in stock.
