China- the world’s largest iron ore consumer and importer recorded imports of iron ore at 283.4 mn t in Jan-Mar’21 against 263 mn t over the CPLY, according to the General Administration of Customs.
Imports picked up by 8% y-o-y due to the resumption of imports from major Brazilian and Australian miners which were hampered last year amid extreme weather conditions.
The country has recorded an iron ore import volume of 102.1 mn t in Mar’21, up by 19% y-o-y.
Average iron ore prices picked in Q1 CY’21 – The quarterly average global iron ore fines (Fe 62%) index increased to $167/t, CFR China in Q1 CY’21 against $134/t, CFR China in Q4 CY’20. The monthly average iron ore prices also picked up to $168/t, CNF China as compared with $164/t, CNF China.
Outlook: The stricter production curbs in China’s Tangshan region may dampen buying interest. Local authorities announced plans to impose production controls on twenty-three steelmakers from March 20 to Dec. 31 in a bid to lower emissions by 30%-50%.
Recently, four more mills were downgraded in terms of their emission category. These four Tangshan steel mills have been downgraded to grade D, which means they might need to cut 50% emissions when the next round of emergency response comes. This has firmed up market expectations of a reduction in Chinese crude steel output for the whole year.
The fundamentals of China’s iron ore market are expected to improve this year vis-a-vis 2020. China Iron & Steel Association (CISA) predicted in Feb’21, when summarizing China’s steel industry performance for 2020, that the country’s demand will ease on lower steel output. Supply may increase both from domestic and international miners because of capacity expansions and gradual recoveries in output from the adverse impact of the COVID-19.
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