China’s imports of iron ore in August rose 5.5% from the prior month, customs data showed on Wednesday, even as operating rates at blast furnaces only slightly improved.
The world’s top iron ore consumer brought in 96.21 million tonnes of the steelmaking raw material last month, up from July’s 91.24 million tonnes, the General Administration of Customs said.
However, that was down slightly from the 97.46 million tonnes imported in August 2021.
“Most major iron ore suppliers in Australia and Brazil are not fair-weather producers, meaning if they mine it, it will come to China,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.
Chinese steel mills shut down blast furnaces in the second quarter because of the high price of iron ore and other steelmaking ingredients, as well as weak demand because of troubles in the country’s property sector and measures to contain the spread of the coronavirus.
In recent weeks, several blast furnaces have resumed operations but operating rates during August were further reduced by the heatwave last month which curbed production in some areas and construction activity, impacting steel demand.
Thus, iron ore arrivals have outpaced demand, resulting in a build-up of portside inventories, said Widnell.
Stocks at Chinese ports hit a four-month high of 143 million tonnes as of Sept. 2, according to SteelHome consultancy data.
During the January to August period, China imported 723 million tonnes of iron ore, down 3.1% from the same period a year ago, customs also said.
China’s steel product exports last month were 6.15 million tonnes, up from 5.05 million tonnes in August 2021.
Exports in the first eight months of the year were down 3.9% from the same period a year ago to 46.23 million tonnes.