China's iron ore imports hit record high in CY'24

• Chinese iron ore inventories rise to 143 mnt
  
  
• Favourable economic policies bolster demand
  
  

China, the world's largest iron ore consumer and importer, recorded iron ore and pellet imports at 1,236.546 million tonnes (mnt) in CY'24 (January-December, 2024), according to General Administration of Customs. The imports witnessed 5% increase y-o-y compared to 1178.809 mnt in the same period last year. Notably, China's iron ore imports reached a record high in CY'24, data maintained with BigMint shows.

This increase is driven by improved steel margins and supportive macroeconomic developments.

Meanwhile, China's iron ore imports increased by 12% m-o-m to 112.486 mnt in December, 2024 as compared to 101.862 mnt in the previous month.

Factors affecting iron ore imports:

• Steady Crude Steel Production: China's crude steel production, despite showing marginal declines in some months, remained relatively stable throughout the year. The total output for January-November 2024 stood at 929 mnt, marginally down by 3% y-o-y. Steel mills prioritized maintaining steady operations, which supported consistent demand for raw materials. but that largely reflected weak output from electric furnace steelmakers, which supply the troubled construction sector and use scrap steel instead of iron ore as a resource.
  
  
• Restocking activity: Iron ore inventories at Chinese ports rose to 143 mnt in CY'24, up from 123 mnt in CY'23, according to SteelHome data. Mills restocked iron ore ahead of peak production seasons, particularly in Q3 and Q4, as they prepared for steady operations during the winter. Restocking activities ahead of festivals and key economic periods further contributed to the increase in imports.
  
  
• Global iron ore prices sharply fall y-o-y by $10/t : Benchmark Fe 62% Australian fines prices sharply dropped by $10/t y-o-y to $110.24/t CFR China in January-December, 2024 from $120.23/tonne (t) in January-December, 2023. The price drop was attributed to weaker global demand, reduced steel production, and mills adopting cost-saving measures such as using economical sintering blends. Additionally, extended blast furnace maintenance schedules in China curbed iron ore consumption.
  
  
• Positive Macroeconomic Developments: Supportive economic policies, including those aimed at revitalizing the real estate and manufacturing sectors, bolstered market sentiment. Additionally, the US Federal Reserve's interest rate cuts created a favorable global economic environment, indirectly benefiting Chinese imports of iron ore.
  
  

Outlook: China's iron ore imports are expected to rise in the near term, supported by ongoing government infrastructure projects and improved liquidity measures. However, potential headwinds, including stricter environmental regulations and volatile global iron ore prices, may pose challenges.