China’s imports of iron ore in July rose 3.1% from a year earlier, customs data showed on Sunday, as steelmakers’ margins improve despite concerns over demand.

The world’s top iron ore consumer brought in 91.24 million tonnes last month, up from 88.51 million tonnes in July 2021, the General Administration of Customs said.

The July import level was also 2.6% higher than the previous month.

Improved profitability has prompted mills in China to restart some blast furnaces that were previously idled as widespread COVID-19 lockdowns hit demand.

A total of 23 blast furnaces in China resumed production between July 21 and Aug. 1, according to metals information provider SMM.

According to a note by ANZ Research, stronger margins for steel mills have offset concerns over demand.

“The recovery in mill’s margins has spurred hopes that production capacity may resume more quickly than expected.”

Demand concerns for the iron ore market, however, are expected to persist due to China’s decarbonisation goals and its ailing property sector. China aims to cut annual steel production for a second straight year to curb emissions.

Iron ore inventories at Chinese ports also remain high. They rose to an over two-month top of 136.6 million tonnes as of August 5, having risen for six consecutive weeks, based on SteelHome consultancy data.

During the first seven months of 2022, China imported 627 million tonnes of iron ore, down 3.4% from the same period a year ago.

China’s steel product exports stood at 6.67 million tonnes in July, up 17.6% from last year.

Exports in the first seven months of the year were down 6.9% to 40.07 million tonnes.

Source: Reuters