China: Iron ore imports up 8% y-o-y during Jan-Feb'24

• Restocking needs push imports higher during Jan-Feb
  
  

China- the world's largest iron ore consumer and importer recorded imports of iron ore at 209.4 mnt in January-February, 2024, according to the General Administration of Customs. As recorded in past few years trend, iron ore import fell in the month of January- February but this year the imports picked up as compared to 194.19 mnt in January-February, 2023 because steelmakers replenished their supplies to fulfill production requirements ahead of the Lunar New Year holidays break.

Major highlights

• Positive macro economics boost global iron ore prices: Benchmark Fe 62% Australian fines monthly average prices increased to around $135/t CFR China in January-February, 2024 as against $130/t CFR levels seen in December, 2023 on positive macroeconomic factors and active purchasing for March delivery shipments. China's central bank's decision to reduce the reserve requirement ratio contributed to the bullish sentiment, prompting some re-stocking activities and a gradual rise in demand from steel mills. However, the mills could not regularly purchase iron ore at high offers as profit margin also played a role for a long time.
  
  
• Restocking ahead of Lunar New Year holidays: As the buyers wanted to make sure they had enough iron ore before the Lunar New Year holidays break. During this time, logistics and transport can be affected, so it's important to have a good supply of raw materials beforehand. This led to increase in iron ore import in China.
  
  

Iron ore inventory levels at major Chinese ports increased to nearly one year high to reach 134.9 mnt by the end of February, marking the highest level since March 2023, according to data from consultancy Steelhome.

Outlook: Iron ore import in coming month is anticipated to remain volatile as few Chinese mills are on maintenance shutdown. Since, the market returned from the Lunar New Year holidays, there has been a lack of demand downstream, leading steel mills to be reluctant in procuring additional port cargoes.