China’s Sept iron ore imports fall as steel margins shrink, domestic supply grows

Oct, 13, 2023 Posted by Gabriel Malheiros

Week 202339

China’s iron ore imports in September fell 4.9% from August, customs data showed on Friday, October 13, as declining steel margins and rising domestic supply curbed buying.

The world’s largest iron ore consumer brought in 101.18 million metric tons of the key steelmaking ingredient last month, down from 106.42 million tons imported in August, which was the highest since October 2020, data from the country’s General Administration of Customs showed.

However, volumes last month were up 1.47% from the same month a year before.

“The overall trend is in line with expectations, but the total volumes imported last month are higher than expected,” said Pei Hao, a Shanghai-based analyst at international brokerage FIS.

Lower steel margins dented buying interest for September-delivery seaborne cargoes, Pei added.

Only about one-third of Chinese steel mills surveyed were operating at a profit by the end of September, down from one-half in late August, data from consultancy Mysteel showed.

The declining trend is expected to continue in October, with shipments from Australia and Brazil, the two major iron ore suppliers, having already dropped early this month, according to analysts.

The chart below shows iron ore exports to China between Jan 2019 and August 2023. The data is from DataLiner.

Iron Ore Exports to China | Jan 2019 – Aug 2023 | WTMT

Source: DataLiner (click here to request a demo)

“China’s iron ore imports in October are estimated at around 99 million tons due to falling demand, reflected in lower hot metal output, as some mills in western regions cut steel production due to losses,” said Cai Yongzheng, a Nanjing-based director of Jiangsu Fushi Data Research Institute.

Lower iron ore imports and a flurry of stockpiling from ports among steel mills ahead of a week-long holiday in early October to meet production needs contributed to falling portside inventories and higher prices in September, which in turn squeezed steel margins.

China’s domestically produced iron ore concentrates stood at around 24.56 million tons in August, a rise of 3.1% year on year, data from the country’s Metallurgical Mines’ Association showed, reducing some appetite for seaborne cargoes.

Iron ore stocks at major ports stood at 108.5 million tons as of Sept. 28, down 8.5% month on month and down 19.7% year on year, respectively, according to data from consultancy Steelhome.

Seaborne iron ore prices averaged $121 a ton in September, 9.6% higher than the August average and 21.4% higher than September 2022, Steelhome data showed.

China’s iron ore imports in the first nine months of 2023 climbed to a record high of 876.65 million tons for the period, up 6.7% from the same period a year before, the customs data showed.

China’s exports of steel products in September jumped 61.8% from the prior year to 8.06 million tons, but fell 2.66% from 8.28 million tons shipped in August, customs data showed.

The world’s largest steel producer shipped abroad a total of 66.82 million tons of steel products from January to September, a 31.8% year-on-year rise.

China imported 640,000 tons of steel products last month, down from 890,000 tons in September 2022, with the total over January-September period at 5.7 million tons, a drop of 31.7% from a year earlier, according to customs.

Source: Reuters

To access the original story, please check: https://www.reuters.com/article/china-economy-trade-ironore/update-1-chinas-sept-iron-ore-imports-fall-as-steel-margins-shrink-idUKL4N3BJ0XK

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