China’s iron ore imports dropped by 9pc to 87.03mn mt in May from 95.71mn mt in the prior month. Imports, however, rose by 3.9pc from the prior-year period on the back of healthy demand and purchases, according to the data by General Administration of Customs (GACC). Iron ore imports in Jan-May 2020 amounted to 445.31mn mt, up by 5.1pc from 423.92mn mt in Jan-May 2019. 

 

The country also witnessed a 30pc drop in its steel exports in May amid a recovery in domestic demand after the country resumed economic activities after the COVID-19 lockdown. At the same time, the demand in major importer countries was hit by the pandemic. 

Chinese steel mills continue to ramp up their production as the economic activities gain momentum and suspended projects resume operations. 

Bullish iron ore prices

Iron ore prices are hovering at around $100/mt cfr China following temporary production halts by Brazil-based Vale at some of its mines. 

 

Chinese iron ore inventories have fallen to the lowest in the last four years. But shipments are expected to register an uptick in coming months with the arrival of vessels booked in April-May. Vale has forecast its iron ore exports to increase in 2020 to China amid lowered demand from other major importers. 

 

Steel exports drop on weak demand

GACC data shows that China’s steel exports in May were 4.4mn mt, down from 6.3mn mt in April 2020. In January-May, China’s steel exports registered a decline of 14pc from the prior-year to around 25mn mt. The 14pc decline in Jan-May was higher than the 11.7pc drop in the first four months. 

Importers of Chinese finished steel were largely impacted by diminishing demand during the pandemic. At present, China’s steel exporters are facing price competition from other countries, resulting in lower exports. 

 

Steel imports rise

In May, Chinese steel imports amounted to 1.28mn mt, up from 1mn mt in April. During Jan-May 2020, steel imports were at 5.5mn mt, up by 12pc from the prior year. Since March 2020, China has become a potential market for steel exports with a gradual recovery in steel consumption. Other countries, however, grappled with COVID-19 disruptions. Exporters from India, Russia, South Korea and Vietnam have been sending material to China. In Jan-May 2020, China’s steel imports rose by 7.4pc from the prior-year period.

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