China: Iron ore imports rise by 3% m-o-m in Sep'24 on improved demand, falling port inventory

China's iron ore and pellet imports touched 104.1 million tonnes (mnt) in September 2024, according to the General Administration of Customs. For the world's largest iron ore consumer and importer, September imports marked a 3% increase y-o-y from the 101.18 mnt registered in the corresponding period last year amid improved liquidity and increased buying interest.

However, China's iron ore imports rose by 5% y-o-y in January-September, 2024 compared to the same period of last year.

Factors affecting China's iron ore imports

• Restocking amid mid-autumn festival: The uptick in purchasing activity ahead of the mid-autumn festival, combined with improved export volumes for finished steel, has bolstered market optimism. This surge in steel sales, alongside a modest increase in apparent consumption compared to the previous month, supports a favourable outlook for China's iron ore imports.
  
  
• Positive macroeconomic trends boost iron ore demand: Positive macroeconomic developments and robust market sentiments have invigorated trading activity. China's central bank has announced a plan to reduce the reserve requirement ratio by 50 basis points, aiming to inject around 1 trillion RMB ($142.20 billion) of long-term liquidity into the market.
  
  
• Global iron ore prices rally following Chinese stimulus: Global iron ore prices have surged in line with steep recovery in futures seen in China ahead of National week holidays, with the government initiating stimulus measures to boost the economy. Spot iron ore fines (Fe 62%) prices have risen to $108/t CFR China yesterday against $89/t CFR China assessed on 24 Sept'24.
  
  
• Iron ore port inventory in China falls: Iron ore inventory at Chinese ports dropped in September, according to SteelHome data. Inventory decreased to 148 mnt in September, 2024 compared to 150 mnt in the previous month.
  
  

Outlook: China's iron ore imports are expected to remain robust in the coming month, bolstered by seasonal demand as industries ramp up production ahead of yearend activities. Continued positive macroeconomic indicators, including the US Federal Reserve's interest rate cuts, are likely to sustain favourable market conditions in the near term.