News Room - Steel Industry

Posted on 26 Apr 2010

China March iron ore imports from Australia up 22 pct

Despite calls to diversify China's iron ore supply sources, imports from Australia, Brazil and India reached 83 percent of the total over the month, up from 80 percent in February.

 

Angered by the "monopoly behaviour" of Australia's Rio Tinto and BHP Billiton and Vale of Brazil, the China Iron and Steel Association (CISA) have urged mills to boycott the three mining giants, but traders said the efforts were doomed to failure.

 

"Supply still can't meet demand, with everyone wanting to build up their stockpiles and make their deliveries at the same time," a trader in east China's Shandong province said. "If you stop importing, the problems obviously get worse."

 

Yang Yongxin, an official with the Ministry of Industry and Information Technology, also stated last week that the government would not back the CISA move.

 

Total imports in March rose 13.46 percent annually and 19.5 percent compared with February to reach 59 million tonnes, with mills continuing to ramp up steel output to prepare for a much anticipated surge in demand over the second quarter.

 

Australian imports amounted to 40.7 percent of the total, down from 41.6 percent in the previous month.

 

Indian ore imports reached 13.46 million tonnes, up 4.25 percent compared to last year and amounting to 22.8 percent of the total, up from 20 percent in February.

 

Brazilian ores stood at 11.78 million tonnes, up 19.9 percent year on year and amounting to 20 percent of the total, up from 18 percent in February.

 

Total imports over the first three months of the year stood at 155 million tonnes, up 18 percent compared to the same period of last year.

 

With demand surging and supplies still tight, average ore prices per tonne reached $101.49 in March, up from $95.93 in February, customs said.

 

The supply strains are unlikely to ease in the coming months, according to Melinda Moore, analyst with Credit Suisse.

 

She said in a note to clients that seaborne deliveries to China from Brazil, Australia, India and South Africa have been declining since the end of last year largely because of restocking in regions outside of China.

 

Even without the CISA boycott, supplies are likely to come under further pressure from May as the long monsoon season begins in India, cutting deliveries to China by as much 7 million tonnes a month from June to October, Moore said.