China: Iron ore imports dip by 5% m-o-m in May’25 amid soft demand, inventory pressure

• Iron ore inventories rise to 140 mnt in Jan-May’25
• Mills preferring medium and low grade fines

China recorded a decrease of 5% m-o-m in iron ore and concentrate imports to 98.13 mnt in May 2025 as compared to 103.14 mnt in the previous month, according to the General Administration of Customs. The slight drop followed subdued market sentiments.

However, in January-May 2025, the world’s largest iron ore consumer and importer received shipments of 486.41 million tonnes (mnt), a 5% drop compared to 512.98 mnt in the same period last year.

Factors affecting China’s iron ore imports

• Crude steel output drop 8%: Domestic crude steel output fell by 8% m-o-m to 86 mnt in Apr’25 against 92.8 in Mar’25. However, crude steel output remains largely steady at 86 mnt compared to 85.9 mnt in the corresponding period last year (CPLY), as per National Bureau of Statistics (NBS) data maintained with BigMint.
• Shift towards medium to low grade fines: In May 2025, Chinese steel mills strategically shifted their procurement preference toward mid-to-low grade iron ore. This move was primarily driven by the need to safeguard profit margins as high-grade fines, especially those above 62% Fe content, became less economically viable. With margins under pressure, mills opted for more cost-effective blends, leading to a decrease in demand for imported high-grade material.
• High portside inventories: Iron ore stockpiles at major Chinese ports remained elevated during the month. Iron ore inventory at Chinese ports rose to 140 mnt in January-May 2025 compared to 136 mnt in the same period last year, according to SteelHome data. Many mills chose to utilize existing inventories rather than place new import orders. This inventory-driven procurement approach further contributed to the overall drop in imports.
• Global iron ore prices fall by $2/t m-o-m: Benchmark Fe62% Australian fines prices also dropped by around $98/t CFR China in May’25 against $100/t in Apr’25 amid subdued buying interest and strategic shifts in procurement by Chinese steel mills. As mills aimed to safeguard their profit margins, they increasingly preferred medium to low grade iron ore over high-grade material, which became less cost-effective at prevailing price levels.

Outlook

China’s iron ore imports may remain subdued in the near term amid high portside inventories and a continued preference for lower-grade fines. Stable crude steel output offers limited to seaborne demand.