China Iron Ore Imports Touch New High In July

By Glenn Dyer | More Articles by Glenn Dyer

China’s imports of iron ore in July surged by nearly a quarter to a record high, copper imports also rose sharply to a second monthly record in a row and crude oil shipments into the country remained near the all-time high set in June.

July’s iron ore imports were the standout surging to a new high of 112.65 million tonnes as steel mills chased supplies of ore amid shortages of some top-grade material

July imports were up 10.8% from 101.68 million tonnes in June and a large 24% above the 91.2 million imported in July 2019.

As a result, Chinese imports for the first seven months of the year jumped 11.8% to 659 million tonnes.

That helped bid up global prices back over $US100 a tonne in July.

Prices rose even further in the first week of August, hitting $US121 a tonne for 62% Fe fines on Thursday.

But Friday saw the US dollar rise and trade tensions with China worsen and that iron ore prices slid $US2.06 to $US119.21 a tonne for 62% Fe fines.

That still left the price up 7.7% from the previous week’s close of $US110.58. That was due to the near 5% jump on Monday.

Reuters reported that average capacity utilisation rates of blast furnaces at 163 mills in China, indicating input of the steelmaking ingredients, was at an average of 86% in July, dipping a bit from 86.4% in the previous month but still at a relatively high level, according to Reuters.

“The jump in imports of iron ore mainly came from non-mainstream suppliers like Africa and India,” the report explained.

Supplies of mainstream ores remain tight, especially from Brazil which is affected by the pandemic.

Steel demand in China has been very strong to support the purchases, helped by low stocks of iron ore at the various mills, and at major ports in northern China.

China’s copper imports hit a record 762,211 tonnes in July, up 16.1% from the previous record of 656,483 tonnes set in June and a massive 81.5% higher than the 420,000 tonnes imported in July 2019.

Imports of copper concentrate were 1.795 million tonnes in July. That was up 12.6% from June, the lowest monthly total since September 2019, but down 13.5% from a year earlier.

Meanwhile, China’s exports of unwrought aluminium and aluminium products were 373,402.3 tonnes last month. That was up 5.5% from June, which was the lowest monthly total since February 2019, but down 23.3% year-on-year.

China’s crude oil imports eased from a record high in July, ending a three-month rally.

Crude imports fell 6.7% to 12.08 million barrels a day (b/d) in July from a record-high 12.94 million b/d in June.

The country imported 51.29 million tonnes of crude in July, down 3.6% from June, 53.18 million tonnes.

But July’s total was still up more than 21% from July, 2019.

The high July volume saw imports for the first seven months of 2020 average 11.01 million b/d, up 11.5% year on year, amid sustained low crude prices. The value of the crude inflows over January-July fell 23.7% on the year to $US138.89 billion.

LNG imports dipped in July. Customs data also showed natural gas imports, both piped and LNG fell nearly 7% to 7.35 million tonnes from July 2019.

China’s coal import fell sharply in July from a year ago but they were up a touch from June.

Total imports of coal rose 3.2% to 26.1 million tonnes in July from June, but were down 20.6% from July 2019.

January-July, China’s coal imports rose 6.8% to 200.1 million tonnes of coal (for all uses,). The growth rate slowed by nearly half from the 12.7% surge reported for the first six months of this year.

China has been restricting coal imports to around 300 million tonnes a year in recent years and if that is any guide, the remaining five months of 2020 will see around 100 million tonnes imported, or around 20 to 24 million tonnes a month.
Soybean imports rose 17% to 10.09 million tonnes.

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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