Chinese iron ore imports fell 11 percent in December from the previous month, but full-year shipments were at a record high, customs data showed on Friday, as the world’s top consumer bought more imported raw material to ramp up steel output.
Arrivals for December came in at about 84.3 million tonnes, versus 94.54 million tonnes in November, according to Reuters’ calculations based on annual data from the General Administration of Customs showed.
Full-year shipments rose 5 percent to a record high of 1.075 billion tonnes, exceeding 1 billion tonnes for a second year.
Chinese steel mills have increased production on the back of a strong recovery in steel prices that has pushed profits to the highest in about two decades.
“The 5 percent annual increase is within our expectations,” said Wang Di, an analyst with CRU in Beijing.
“Big miners have expanded their production and shipments while China’s crackdown on illegal furnaces that use scrap for production in the first half spurred demand for seaborne iron ore. Appetite for imported iron ore from Chinese steel mills remains strong.”
Demand for higher quality imported iron ore, mainly from Australia and Brazil, has partly been driven by China’s pollution crackdown.
Chinese steel prices have nearly tripled from their lows in late 2015. Prices surged 46 percent last year, while Chinese iron ore prices jumped 16 percent.
Iron ore demand and steel output are expected to be at 1.12 billion tonnes in 2018 and 838 million tonnes respectively, the China Metallurgical Industry Planning and Research Institute said last month. Australia on Monday said it expects iron ore prices to average $51.50 a tonne this year, down 20 percent from 2017, because of rising global supply and moderating demand from top importer China as its steel sector shrinks.