China increased iron ore imports by 7.7% y/y in January-June

In June, Chinese steelmakers increased the import of iron ore by 7.3% y/y

In January-June 2023, Chinese steel companies increased the import of iron ore by 7.7% compared to the same period in 2022 – up to 576.1 million tons. This is evidenced by the data of the China Iron and Steel Association (CISA).

In June 2023, Chinese steelmakers imported 95.5 million tons of iron ore, which is 0.7% less compared to the previous month, and 7.3% more y/y. The average cost of imports in June was $106.7/t, which is 8.7% less compared to May, and 21% y/y.

The import of steel raw materials grew during June amid positive expectations of the market regarding economic incentives from the authorities. This, in turn, supported the consumption of iron ore by steel enterprises and activity on the steel market. In addition, the increase in the price of scrap contributed to a decrease in its use in the charge in favor of iron ore.

As of June 14, 2023, iron ore prices on the Dalian Commodity Exchange increased by 3.2% compared to the previous week – up to 829 yuan/t ($115.68/t). This was helped by an improvement in credit policy, as well as a three-week reduction in raw material stocks at the ports, indicating good demand.

By the end of 2023, as experts expect, iron ore prices could fall by 28% amid falling steel production and demand in China. Morgan Stanley and Kallanish forecast iron ore quotations at the end of 2023 at the level of $90/t, CBA – $100/t.

As GMK Center reported earlier, in 2022, China reduced the import of iron ore by 1.5% compared to 2021 – to 1.11 billion tons.