China, the world’s largest iron ore consumer and importer, recorded imports of the material at 89.79 million tonnes (mn t) in May’21 against 98.57 mn t in Apr’21, according to the General Administration of Customs data.
The imports dropped by 9% month-on-month (m-o-m) due to falling steel margins from mid-May amidst a renewed surge in iron ore prices even as China’s government focuses on steel output control measures.
The crude steel output among the member mills of the China Iron & Steel Association (CISA) has reduced further by 3.9% at the end of May’21.
However, the country’s total iron ore imports were recorded at 471.76 mn t in Jan-May’21, up by 6% year-on-year (y-o-y).
Average iron ore prices drop in May’21: The average global iron ore fines (Fe 62%) index fell to $208/t, CNF China, in May’21 against $213/t, CNF China a month ago. The decline in prices was largely due to a steep fall in Chinese iron ore and steel futures which plunged on the government’s intervention to regulate the same after they posted a sharp rally earlier in the month.
Outlook
Market sentiments may turn further positive in early June amid talks of the potential easing of production curbs in China’s top steel-making city, Tangshan. Also, a strong ferrous futures market may support the spot prices. This has already resulted in a slight recovery of demand for low and high-grade ores.
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