China: Iron ore imports rise by 6% y-o-y in H1CY'24 on supported steel demand

China, the world's largest iron ore consumer and importer, recorded iron ore and pellet imports at 611 million tonnes (mnt) in H1CY'24 (January-June, 2024), according to General Administration of Customs. The imports witnessed 6% increase y-o-y compared to 577 mnt in the same period last year. This increase is driven by steady crude steel production and supportive market fundamentals.

However, China's iron ore imports inched down by 4% m-o-m to 97.613 mnt in June, 2024 as compared to 102.033 mnt in the previous month.

Iron ore inventory at Chinese ports rose in January-June, 2024, according to SteelHome data. Inventory increased to 138 mnt in H1CY'24 as compared to 132 mnt in the same period last year.

Factors affecting iron ore imports:

• China's crude steel output remains largely stable: China's crude steel output was recorded at 438.6 mnt in January-May, 2024, marginally down by 1% y-o-y.
  
  
• Global iron ore prices remain largely stable y-o-y: Benchmark Fe 62% Australian fines prices remained largely stable y-o-y at $117.6/t CFR China in January-June, 2024 from $118.3/tonne (t) in January-June, 2023. This rise occurred despite cautious demand, largely driven by favourable sentiment from Chinese government. According to a report, the Ministry of Natural Resources is exploring strategies to assist local governments in reclaiming and acquiring vacant land for housing projects. However, mills are adjusting purchases based on production margins. The upcoming rainy season will significantly impact transportation and outdoor construction.
  
  
• Rising inventories: Following a drop in China's portside inventories to around 20% below historic averages in the December quarter of 2023, stockpiles have been rebuilt to levels above the long-run average and this inventory restocking at ports triggered strong imports in H1.
  
  

Outlook: It is anticipated that China's iron ore imports are likely to remain volatile in the coming days amid seasonal disruptions, high port inventories, and regulatory impacts.