China July iron ore imports surge amid growing Australia, Brazil supply
China’s iron ore imports surged 21% in July from the month before to their highest level since January, customs data showed on Thursday, as supply grew from miners in Australia and Brazil.
Arrivals of iron ore, a key steelmaking raw material, came in at 91.02 million tonnes in July, according to data from the General Administration of Customs.
That was up from a 40-month-low of 75.08 million tonnes in June and 1.2% higher than 89.3 million tonnes in July 2018.
Over the first seven months of 2019, China imported 590.08 million tonnes of iron ore, down 4.9% from the same period last year, the customs data showed.
BHP Group Ltd reported a rebound in iron ore output in the quarter that ended June 30 after a cyclone hit Australian production in March.
Meanwhile, Brazil’s iron ore exports rose to the highest level in nine months in July as top miner Vale restarted production at its largest mine following a fatal accident at another site in the country in late January.
China’s July iron ore imports were back near the 91.26 million tonnes seen in January.
Imported iron ore inventory at Chinese ports rose to 121.05 last week from a 2-1/2-year-low of 115.25 million tonnes in late June, according to data compiled by consultancy SteelHome.
Weekly utilisation rates at steel mills across China had risen to 67.27% as of last week from 66% in July, when top steelmaking hubs in northern China stepped up production restrictions in heavy industry to improve air quality, data compiled by Mysteel consultancy showed.
China’s iron ore futures prices have this week been hit by expectations of rising supply and concerns over escalating trade conflict with the United States.
But analysts remain optimistic of domestic demand as total steel output is still running at a high level and as anti-pollution curbs are expected to be relaxed in August.
“The trade war mainly hurts business sentiment and may have an impact on iron ore prices, but importers can hedge against the devaluation of yuan,” Zhao Yu, an analyst at Huatai Futures, said before data released.
“There’s still rigid demand in steel mills, imports will not be affected.”
China’s steel product exports fell 5.4% year-on-year to 5.57 million tonnes in July. For the first seven months of the year, exports were down 2.9% at 39.97 million tonnes, the customs data showed.
Source: Reuters (Reporting by Muyu Xu, Min Zhang and Tom Daly; Editing by Joseph Radford)