China: Iron ore imports rise by 7% y-o-y in Jan-May'24

China, the world's largest iron ore consumer and importer, recorded iron ore and pellet imports at 513.746 million tonnes (mnt) in January-May, 2024, according to General Administration of Customs. The imports witnessed 7% increase y-o-y compared to 481.03 mnt in the same period last year.

Meanwhile, China's iron ore imports remained stable as compare to the previous month. The Central Bank of China reduced interest rates on personal housing provident fund loans by 0.25 percentage points on 18 May, affecting both first and second sets of loans. The announcement generated a bullish mood in the market, with traders anticipating favourable outcomes.

Factors affecting iron ore imports:

• China's crude steel output remains largely stable: China's crude steel output was recorded at 343.7 mnt in January-April, 2024, down slightly by 3% 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 $119.8/t CFR China in January-May, 2024 from $119.6/tonne (t) in January-May, 2023 due to positive economic news about steel production coupled with increased iron ore demand. Meanwhile, the interest rate cut by Chinese banks at the end of 2023 and expectations of enhanced financial market liquidity in the first quarter of 2024 have bolstered market confidence, indicating the nation's commitment to utilising monetary measures for swift economic development in this period.
  
  
• China's macro indicators improve in Q1, realty in negative zone: China's macro indicators showed a y-o-y improvement in the first quarter (Q1, January-March) of 2024, as per data tracked by BigMint. Though real estate was down, demand from other sectors like manufacturing, infrastructure and automobiles rose. This somewhat kept up the momentum of iron ore imports
  
  

Outlook: It is anticipated that China's iron ore import is likely to remain volatile in the coming days as lower steel prices and reduced demand could affect steel mills' margins and their appetite for iron ore imports. However, market participants will adopt cautious strategy possibly due to uncertainties surrounding future developments in China's steel industry and overall economic trends.