China: Iron Ore Imports Fell in Q2 CY19 Amid Supply Restraints

Iron Ore Imports in June fell to 3.4 years low since Feb’16 at 75.18 MnT

According to General Administration of Customs, China – the world’s largest iron ore consumer and importer, recorded imports at 239.7 MnT in Q2 CY19, down 8% as compared to 260.76 MnT in Q1 CY19.

The total imports by the country for half year H1 CY19 depicted 6% fall to 500.46 MnT as compared with H1 CY18 at 530.48 MnT.

Why did Chinese imports fell for the quarter?

1. Global material constraints: Vale dam accident of Jan’19 and Weather disruption at Australian port towards Mar’19 end led to material availability crisis in global market. This led to declining exports to China. During the quarter Australian major miner, Rio announced drop in its iron ore Pilbara shipments guidance due to mine operational challenges at the company’s Greater Brockman hub. Rio Tinto 2019 Pilbara iron ore shipment guidance reduced to 320-330 MnT as against 333-343 MnT previously.

2. High global iron ore prices: The spot iron ore fines (Fe 62%) index price for Q2 CY19 witnessed a hike of 22% to USD 100/MT as against USD 82/MT in Q1 CY19. The prices increased during the quarter and reached at USD 118/MT, CFR China towards June’19 end, hovering five years high amid material shortage.
Monthly average global iron ore fines (Fe 62%) prices in June’19 recorded at USD 109/MT as against May’19 at USD 99/MT, CFR China.

3. Falling inventory at Chinese ports: Rising demand followed by falling inventories at Chinese ports favored seaborne iron ore offers. As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports dropped to USD 115.25 MnT towards end of Jun’19.This has dropped to lowest levels since mid Oct’17 due to high demand for medium grade iron ore.

Iron Ore Imports in June fell to 3.4 Years Low

Chinese iron ore imports for the month fell to 75.18 MnT, down 10% as against 83.75 MnT in May’19. Imports in June’19 witnessed lowest since Feb’16 imports recorded at 74.78 MnT. On yearly basis, imports recorded drop compared to 83.42 MnT in June’18.