Posted on 13 Jan 2015
Iron ore imports by China rebounded to an all-time high last month, capping record annual purchases, as slumping prices boosted demand for overseas supplies in the biggest user and some local mines were shuttered over winter.
Shipments climbed 29 percent to 86.85 million metric tons from 67.4 million tons in November and 73.4 million tons a year earlier, according to customs data today. Imports last month were the highest level on record, according to data compiled by Bloomberg dating back to 1990. Over 2014, they totaled 932.5 million tons from 820.3 million tons in 2013, the data showed.
The steel-making ingredient collapsed 47 percent in 2014 as BHP Billiton Ltd. (BHP), Rio Tinto Group and Vale SA (VALE5) raised low-cost production in Australia and Brazil, spurring a global surplus. Prices may climb this half on seasonal trade and moderating global supply growth, according to Morgan Stanley. Some mines in China are closed over the winter months, boosting mills’ reliance on stockpiles and imports, and separate data today showed a further drop in the reserves held at ports.
“With winter approaching, buyers were more willing to step up to the plate, especially given stockpiles had fallen materially,” Jeremy Sussman, an analyst at Clarkson Capital Markets LLC, said before the customs and port data were released. Imports will continue to grow in 2015, driven by higher steel output and a rise in low-cost seaborne supply, he said.
Ore with 62 percent content delivered to Qingdao, China, lost 1.2 percent to $70.30 a dry ton yesterday, according to Metal Bulletin Ltd. While the benchmark dropped to a five-year low of $66.84 on Dec. 23, it climbed to $71.49 on Jan. 6, the highest level in a month.
Stockpiles at China’s ports shrank 0.8 percent to 99.85 million tons as of Jan. 9, dropping below the 100 million ton level for the first time since February, according to Shanghai Steelhome Information Technology Co. The holdings shrank for a seventh week for the longest run of declines in two years. Reserves fell 12 percent since peaking in July.
About 71 percent of the port inventories are owned by mills and the remainder belongs to traders, Steelhome said in an e-mailed report. The holdings, tallied at 44 ports, are sufficient to support steel-making in China for 30.37 days, it said.
