Dry Bulk Market: First Quarter Iron Ore Imports From China Were Down By 8.5%

China’s iron ore imports were down by 8.5% during the first quarter of 2022. In a recent report, shipbroker Banchero Costa said that “2021 proved fairly robust, but far from remarkable, in terms of global seaborne iron ore trade. Total global loadings in the full 12 months of 2021 were up +0.7% yearon-year to 1,555.3 million tonnes, according to vessels tracking data from Refinitiv. This was marginally higher than the 1,526.0 mln tonnes in the 12 months of 2019, a year which was affected by the Brumadinho dam disaster. It was however still slightly below the all time record 1,557.3 mln tonnes in the 12 months of 2018.

According to Banchero Costa, “total iron ore shipments from Australia actually declined by -0.3% y-o-y in the 12 months of 2021, to 883.8 mln tonnes. On the other hand, total shipments from Brazil surged by +3.8% y-o-y in the same period to 346.9 mln t. Do note however that this is still below the pre- Brumadinho level of 386.9 mln tonnes in Jan-Dec 2018. Brazil now accounts for 22.3% of global iron ore shipments, after Australia’s 56.8%. Mainland China is by far the largest importer of iron ore in the world. In Jan-Dec 2021, China accounted for 68.0% of global iron ore imports. However, iron ore imports into China corrected significantly in 2021 from the record levels seen previously”.

The shipbroker said that “China’s iron ore imports in the 12 months of 2020 increased by a massive +6.9% y-o-y to 1,108.4 mln t, from 1,036.4 mln t in 2019. In 2020, China took advantage of favourably low prices of the commodity when most of the rest of the world was shut down in lockdowns. However, high iron ore prices in 2021, combined with a slowdown in construction activity following the financial troubles of developer Evergrande, resulted in a significant slowdown in steel production and iron ore demand in China. In 2021, China imported just 982.3 mln tonnes of iron ore, down -11.4% y-o-y, and the lowest annual volumes since 2016. It is not looking any better this year. In the first 3 months of 2022, China imported just 252.7 mln tonnes of iron ore, down -8.5% y-o-y from the 276.1 mln tonnes imported in the first quarter of 2021. This was the worst first quarter since 2017.

“To make things even worse, Covidrelated lockdowns are now spreading throughout China, as the country insists on sticking to its “Dynamic Zero-Covid” policy. Whilst all the attention is on Shanghai, perhaps even more worrying from a steel industry point of view is the on-off lockdown in Tangshan, Hebei Province. Tangshan, a steelmaking hub about 100 miles from Beijing, has reenforced Covid-19 lockdowns in some districts again on the 19th of April, just over a week after lifting city-wide curbs. The city locked down five districts from 6 a.m. Tuesday and will conduct mass-testing, the local government said, after reporting 29 cases coronavirus cases on Monday. Tangshan hosts about 13% of China’s steel output, and some production was halted during a 20-day lockdown that ended on April 11. In terms of sources for China’s iron ore imports, things changed in a negative way for tonne-miles. Australia still remains by far the top source of iron ore for China, with a 68% share in 2021. That said, iron ore imports from Australia to China in 2021 declined by -8.6% y-o-y to 668.0 mln tonnes, from 731.3 mln t in 2020. Brazil remains in second spot with a 20% share in 2021. Imports to China from Brazil declined by -14.0% y-o-y to 199.9 mln tonnes in 2021, from 232.4 mln t in 2022. Volumes from South Africa declined by -28.8% y-o-y to 25.4 mln tonnes in 2021, and from India increased by +9.9% y-o-y to 15.4 mln tonnes. In 1Q 2022, imports from Australia were down -1.3% y-o-y compared to the first quarter of 2021, whilst volumes from Brazil were down a massive -24.3% y-o-y from 1Q 2021”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide