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Dry Bulk Market: Japan’s Iron Ore Imports on the Decline

As China’s iron ore needs increase, Japan’s dwindle, in what could be a further sign of the dry bulk market’s instability. In its latest weekly report, shipbroker Banchero Costa said that “while Chinese production of steel continues to increase, a slump in Japan’s steel output led to a significant decline in iron ore usage and therefore imports of iron ore into the country. Japan’s crude steel output is expected to fall below 80 mln tonnes for the current financial year to March 2021, according to Japan Iron and Steel Federation’s new chairman, Eiji Hashimoto, as quoted by Reuters. Japan’s crude steel output for the year to March 2020 was 98.43 mln tonnes, down -4.3% y-o-y.

Source: Banchero Costa

According to Banchero Costa, “in the first half of 2020, Japan imported just 44.4 mln tonnes of iron ore, according to vessel tracking data from Refinitiv. This represents a net decline of -11.0% y-o-y, compared to the 49.9 mln tonnes imported in the same period of 2019, and is also down -21.5% from the 56.5 mln tonnes imported in January-June 2018. On a single-month basis, January 2020 showed a -12.4% year-onyear decline to 7.9 mln tonnes, whilst February showed a +6.8% increase y-o-y to 8.3 mln tonnes, and March recorded a -4.3 y-o-y decline to 8.0 mln tonnes. April was +15.8% y-o-y to 8.3 mln tonnes, but May showed a contraction of -24.5% y-o-y to 6.8 mln tonnes. In June 2020 we saw arrivals as low as 5.2 mln tonnes. This was -40.7% less than the 8.7 mln t imported during June 2019. Iron ore imports to Japan are predominantly from Australia, which also this year accounts for 67.3% of Japan’s total”.

The shipbroker added that “shipments from Australia to Japan have been down by -12.7% y-o-y in 1H 2020, to 29.9 mln t, from 34.3 mln t in the same period last year. Moreover, volumes from Brazil to Japan, decreased sharply by -25.5% y-o-y to 4.7 mln tonnes, from 6.4 mln tonnes in 1H 2019. Brazil accounts for 11% of Japan’s total iron ore imports this year. Imports from Canada, on the other hand, increased by +6.3% year-onyear to 3.3 mln tonnes. Also, Japan boosted imports from the Philippines, which went up by +58.5% y-o-y to 2.5 mln tonnes in the first half of 2020. Volumes from South Africa were flat at 1.7 mln tonnes, +0.7% y-o-y. Looking back at last year, Japan’s total imports were only 99.6 mln tonnes in the 12 months of 2019. This represented a decline of -9.0% y-o-y, compared to the 109.5 mln tonnes imported in 2018, and -13.3% from 114.9 mln t in 2017”.

Source: Banchero Costa

“During the whole of 2019, imports from Australia to Japan declined by -7.0% y-o-y to 68.0 mln tonnes. Imports from Brazil declined by -29.5% y-o-y in the whole of 2019 to 12.0 mln tonnes. Volumes from South Africa were down -16.0% y-o-y in 2019 to 3.3 mln tonnes. The vast majority of the iron ore imported by Japan in 2019 (74.7 mln tonnes out of 99.6 mln tonnes) was shipped on Capesizes or VLOCs. A further 13.5 mln tonnes was shipped on Post-Panamaxes or Baby-Capes, and just 9.6 mln tonnes on Kamsarmaxes or Standard Panamaxes. Major iron ore ports in Japan by volumes are Oita (17.4 mln tonnes discharged in 2019), Kisarazu (13.5 mln t), Fukuyama (11.1 mln t), Kashima (10.9 mln t), Mizushima (10.2 mln t), Kakogawa (10.0 mln t), Kawasaki (8.9 mln t), and Chiba (5.8 mln t)”, Banchero Costa concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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