As we forecast a month ago, China’s iron ore imports hit their second-highest annual figure on record in 2019 as shipments continued a solid second half rebound from a slow start to the year.
That second-half recovery was topped off by a surge in December imports ahead of the early Lunar New Year break which starts January 25 this year, instead of the February date of the past couple of years.
China reported Tuesday that it imported 1.069 billion tonnes of iron ore in 2019, up from 1.064 billion tonnes a year earlier, data from the General Administration of Customs showed on Tuesday. The record remains 2017’s 1.075 billion tonnes.
In December, imports surged 11.8% from a month earlier to 101.3 million tonnes – the highest monthly import level in 27 months and a result of the early timing of the week-long Lunar New Year break.
That, in turn, means the import figure for January will fall sharply when released in a month’s time.
In fact, it was a very solid second-half recovery in shipments from big miners after disruptions earlier in the year – the January 25 mine tailings dam disaster at a mine owned by Brazil’s Vale, Cyclone Veronica in WA in March and April and operational problems at BHP and especially Rio Tinto.
Those events saw iron ore prices surge more than 140% at their peak in early July to a seven-year high of around $US125 a tonne.
They are currently around $US90 a tonne (for 62% Fe ore fines) but are expected to fall over 2020 as Vale brings more of its idled export capacity on stream in Brazil.
The second half rebound in imports also coincided with higher government spending on infrastructure which helps profit margins at steel mills recover as well thereby supporting high levels of demand for iron ore imports.
That second-half rebound can be seen from the import data for the seven months to July – they totaled 509 million tonnes, down 4.9% on the same period in 2018.
China’s steel product exports recovered from November to 4.68 million tonnes but were still well below 5.56 million tonnes in the same period last year – a function of the import of higher tariffs in the US.
Full-year exports totaled 64.29 million tonnes, down 7.3% from a year earlier.
Steel exports have cooled since the second half of 2019, hit by Beijing’s efforts to cut overcapacity, along with slower global demand and trade frictions, especially with the US.
Some sort of preliminary trade deal is due to be signed later today (Wednesday) by the US and China.