SHANGHAI: Chinese iron ore imports surged 22 per cent in November from a year earlier, customs data showed, as big miners in Australia and Brazil won market share even as steel output cuts push the price of the raw material lower.
November shipments rose to 82.13 million tonnes, data from the General Administration of Customs showed, also up 8.8 per cent from the previous month, although imports for the first 11 months were up just 1.3 per cent from a year ago.
Cooling economic growth in China, the world’s top producer of steel, has already hit industrial demand and steel mills are expected to step up production cutbacks as losses deepen.
“We aren’t seeing any restocking activity going on now but certainly the additional growth that we continue to see in capacity in Australia is lending itself to stronger imports and the continued closure of domestic iron ore mines in China is supporting that,” said Daniel Hynes, senior commodity strategist with ANZ.
“There would certainly be a component of opportunistic buying, but considering the weakness in the steel market in China, it’s hard to see how that type of support would be sustainable.”
Shanghai steel futures have tumbled 40 per cent since the beginning of this year. Slower demand from China and rising supplies from top miners have dragged down spot iron ore prices by 45 per cent so far this year.
China’s crude steel output will fall for a second straight year in 2016, as a cooling economy hurts demand in the world’s top producer, underscoring the bleak outlook for the steel and iron ore sectors.
Steel product exports slid 1.1 per cent to 9.61 million tonnes in November from a year ago, but total exports for the first eleven months jumped 21.7 per cent to 101.7 million tonnes from a year ago. Weak domestic demand has driven Chinese steel mills to boost sales abroad.
