China’s imports of pellets and concentrates dropped 44.77% y-o-y to 13.58 million tonnes (mnt) in January-October 2022 as against 19.66 mnt recorded in the corresponding period last year (CPLY), according to the General Administration of Customs.
Imports fell y-o-y due to sustained crude steel production cuts, slow bookings by traders in anticipation of weak demand from Chinese mills, and preference for low/medium grade ore due to shrinking steel margins.
India remained the largest exporter of pellets to China at 4.14 mnt in January-October. However, shipments from India fell by 38% as against 6.69 mnt in CPLY. There have been no supplies from India since last three months (August-October).
Kazakhstan was the second largest supplier at 1.72 mnt followed by Australia at 1.36 mnt.
Factors weighing on pellet imports-
- Imports from India fall post-export duty: China’s pellets imports from India declined as Indian producers found it unviable to export due to the 45% tariff imposed on the material in late May. Several sources previously corroborated that unless the duty is removed or reduced, there would be no outbound shipments, given that global iron ore prices have fallen sharply. The 45% export duty slapped in May impacted domestic prices as export demand shrunk.
- Decline in global iron ore prices: Global iron ore prices have been declining over the last few months on a continued bearish market outlook. Global iron ore prices hit a one-year low in October.
Imports rise m-o-m in October
China’s pellets imports improved by 25% m-o-m to 1.3 mnt in October as against 1.04 mnt in the previous month. Imports increased as most steelmakers preferred pellets over iron ore lumps amid the approaching winter season.
Russia was the largest exporter with 333,265 t in October followed by Kazakhstan and Australia with 149,914 t and 79,182 t respectively.
Outlook
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