NEW YORK ( TheStreet) -- China's steelmaking industry, so tightly linked to the share-price valuations of mining concerns and dry-bulk shipping lines, has transmitted a few worrisome signals of late, at least according to some observers.

At issue is the amount of iron ore that has accumulated in stockpiles at Chinese ports over the last few months. The total amount reached 80 million metric tons this week, according to Jeffrey Landsberg, an independent analyst and data cruncher who specializes in studying the dry-bulk shipping trade. That's near an all-time record amount.

On the output end of China's blast furnaces, stockpiles of flat steel and products used in construction have also steadily expanded over the last two months, swelling to 15.4 million tons, up 18% since Dec. 31 alone.

Landsberg, who gathers his numbers from steel-industry sources in China for his own research shop, Commodore Research, pointed all this out in a recent report. Increasing supplies of iron ore at the ports, where it awaits shipment to steelmakers, along with rising inventories of completed steel, will likely lead to a short-term drop in iron ore demand over the next few weeks, Landsberg wrote.

When it comes to the dry-bulk shipping trade, especially those companies that charter the humongous Capesize ships that specialize in iron-ore transport, "the expected slowdown could not come at a worse time," Landsberg said.

Indeed, a well-documented glut of newly delivered dry-bulk vessels has led to a collapse in shipping rates this year. The going daily rate for a Capesize ship on the spot market has been hovering around $6,000 for weeks. On Wednesday, the figure dropped again, to $5,350 a day. (That's well below the amount it costs to operate such vessels, estimated at between $7,000 and $10,000 a day.)

Share prices in the sector have followed. Industry leaders such as DryShips ( DRYS), Diana Shipping ( DSX) and Genco Shipping & Trading ( GNK) have seen their stocks flounder over the last six months, even as the shares of the big miners who use their services have rocketed, in some cases doubling in value.

Just year-to-date, DryShips has lost 13%, Genco -- which has greater exposure to the spot market than others -- has fallen 20%, and Excel Maritime ( EXM) has dropped 11%. Eagle Bulk Shipping ( EGLE), which has faced counterparty-risk issues after one of its charterers defaulted, has lost 18% since the end of 2010. Diana, which reported year-end results on Tuesday, has held up better than the rest. Its shares are basically flat on the year.

Landsberg doesn't believe that the most-recent stockpile data prefigure the doomsday scenario that has everyone in the investment world on edge: a hard-charging Chinese economy that suddenly slows due to the inflation-curbing moves put in place by the country's monetary and banking authorities.

In an email, Landsberg told the TheStreet, "That said, the stockpiles need to be monitored closely -- and could end up being an early sign of something more substantial brewing in China, but I don't think so.... I think the Chinese economy will continue to expand rapidly but we shall see."

Other observers of raw materials markets were also optimistic. "We've seen iron-ore pricing remain firm. That's a good indicator," says Anthony Rizzuto, the metals and mining equities analyst at Dahlman Rose in New York. The analyst said that the bump in stockpile amounts likely occurred as a kind of natural move by iron ore buyers ahead of the Lunar New Year holiday in China. He said that Chinese consumer demand remains strong, which will buttress steel production.

So far this earnings season, the biggest iron ore miners in the world have reported blockbuster profits, helped by the rising price of seaborne iron ore -- which itself was helped by a shift to short-term supply contracts between miners and global steelmakers last year.

Even the North American-focused iron-ore miner Cliffs Natural Resources ( CLF) had a banner 2010, with its CEO predicting more good times this year.

Brazil's Vale ( VALE) is slated to report 2010 results on Thursday, the last of the world's big three iron ore miners to release results, after Rio Tinto ( RIO) and BHP Billiton ( BHP).

-- Written by Scott Eden in New York P/>
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