Iron Ore Prices Regain Ground On China Imports

By Glenn Dyer | More Articles by Glenn Dyer

Iron ore prices hit a month high on Monday, the day after the country’s trade figures for August showed a near-record 91 million tonnes of ore was imported last month.

That data came on the weekend after China’s central bank cut bank reserve ratios for the third time this year – a move investors saw as yet another attempt to stimulate domestic demand (there were four cuts in the ratio in 2018).

And data from the Pilbara Ports Authority showed a sharp rise in exports to China last month.

The Metal Bulletin’s price for 62% fines rose 4.4% to $US92.97 a tonne the highest level since August 8. The benchmark index has now jumped 14.1% from the seven-month low of $US81.47 a tonne struck in late August. More than half that rise has come in the past six trading days.

The rebound in prices came despite a solid lift in Chinese iron ore imports during August, according to official data released by China’s NBS on Sunday. They increased by 6.2 percent to 94.9 million tonnes, the largest monthly total since January 2018.

Iron ore stocks at Chinese ports rose by 1.2% to 126.7 million tonnes last week, according to Reuters – the highest level since late May.

Meanwhile, iron ore export volumes from Port Hedland rose 7.3% year-on-year to 38.14 million tonnes in August, according to the Pilbara Ports Authority (PPA)

August’s figure was up 10.5% from 34.53 million tonnes exported in July.

But data out last week showed that Brazilian iron ore export volumes fell 155% year on year in August.

Data from the country’s economic ministry showed that Brazil exported 30.11 million tonnes of iron ore last month, compared with 35.62 million tonnes in the same period in 2018,

That was down more than 1% from the 34.2 million tonnes shipped in July – which was the highest since 2018 and before the January 25 mine dam wall disaster.

The country exported 29.4 million tonnes of iron ore in June, down by 16.7% from 35.3 million tonnes in the corresponding month if last year and 1.4% lower than 29.8 million tonnes of exports in May 2019.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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