BEIJING: China’s appetite for iron ore is likely to have continued unabated in March, but it seems increasingly likely that the first quarter of 2017 may prove to be as good as it gets this year for imports of the steel-making ingredient. China imported 90.3 million tonnes of iron ore in March, according to vessel-tracking and port data compiled by Thomson Reuters Supply Chain and Commodity Forecasts. If the estimate is matched by official customs figures, due next week, it will be only the fifth time that monthly imports have exceeded 90 million tonnes, the other occasions being January this year, November and September last year and in December 2015. The vessel-tracking and port data is typically more conservative than customs data, undercounting by 3.5 per cent over 2016, meaning that the risk is that March imports are higher than suggested by the data.
China’s imports of iron ore in the first quarter of 2017 have been robust, mainly on the back of strong steel prices and optimism about the resilience of the construction and infrastructure sectors, the main steel consumers. But there are already signs that the market is realising it got ahead of itself, with spot iron ore prices slipping below $US80 a tonne overnight, down more than 15 per cent from the peak this year on February 21. The spot price is now virtually flat from the $US78.87 at the end of last year, showing that the rally from December 2015 to February, which resulted in prices more than doubling, is starting to unwind. Much of the focus on why the price gains were unsustainable has been on the rapid build-up of iron ore inventories at Chinese ports, with industry consultants SteelHome saying stockpiles at 46 ports reached a record 132.5 million tonnes in the week to March 31. This is some 65 per cent higher than the 80.5 million tonnes recorded in October 2015, just prior to the start of the strong rally in prices.
