China’s iron ore imports recovered in January to one of the highest levels on record, Thomson Reuters ship-tracking data showed, as steel producers replenished inventories ahead of a week-long holiday and the end of steel output curbs next month.
Seaborne shipments of the steelmaking raw material rose to 93.7 million tonnes last month, according to data compiled by Thomson Reuters Supply Chain and Commodity Forecasts. Shipments in February have already surpassed 70 million tonnes, the Supply Chain data showed.
The January figure is up from December’s 84.14 million tonnes reported by China’s General Administration of Customs, and is the sixth-highest on record, just below the 94.54 million tonnes that arrived in November.
The monthly data released by Customs reflects when the cargoes are cleared by officials and therefore the figures may differ from the ship-tracking numbers.
“Some Chinese steel mills have already sold out orders for February, so they made bookings for iron ore to lock in profit, in case prices would go up after the holiday,” said Hu Hao, a business manager who works for Shanxi Jianbang Group.
China will release its January trade figures on Thursday.
“There was some restocking by mills in the run-up to the Lunar New Year holiday and miners have also increased shipments to China, mainly bought by traders,” said an iron ore trader in Qingdao, China’s second-biggest iron ore importing port in 2017.
The week-long Lunar New Year break starts on Feb. 15.
The sustained increase in imports so far this month also shows steel mills, particularly in the northern region, were preparing to ramp up output when production curbs are lifted next month.
China ordered 28 northern cities to cut steel output by up to half from mid-November as part of efforts to fight smog. The curbs will be lifted after March 15, when the winter heating season ends.
“Steel mills are still earning good profit so they will continue to produce as much as they can,” said a Shanghai-based trader.
China’s top steel-producing Hebei province said last week it will not extend production curbs beyond mid-March.
Top iron ore suppliers Australia and Brazil also shipped out large volumes in January. Exports from Australia’s Port Hedland reached 41.1 million tonnes and shipments from Brazil hit 30.4 million tonnes, both record highs for January, said Argonaut Securities analyst Helen Lau.
Iron ore shipments from Iran, China’s fifth-biggest supplier last year, rose 29 percent to 1.54 million tonnes in January as exporters pushed more cargoes ahead of planned export duties next month, said Keyvan Jafari Tehrani, managing director at Iranian iron ore trader Jame Tejarat Co.
China imported a record 1.074 billion tonnes of iron ore in 2017, with Australia supplying more than 60 percent of the total and Brazil about 20 percent.