Iron ore imports to China may reach a record in October

According to ship and port tracking data, China is likely to import up to 120 million tons of iron ore in October this year, hitting a record high. This is stated in a column by Reuters columnist Clyde Russell.

This will increase the mismatch between demand for raw materials and the still weak level of finished product production.

In September, according to official customs data, the country imported 104.1 million tons of ore. October volumes may become a historic high – the previous one was set in July 2022 (112.7 million tons).

According to data collected by Kpler commodity analysts, October ore imports to China will reach 120.5 million tons, while LSEG analysts forecast 117.3 million tons. It is likely that the mood of steel mills and traders has improved amid incentives announced by Beijing and lower spot prices for this raw material.

In September, the observer notes, the price of contracts on the Singapore Exchange fell to a 22-month low, hitting $91.10/t on September 10. Then the ore traded in a narrow range around this level until the end of the month. Much of the raw material coming in October is likely to have been purchased at relatively low prices.

Following the announcement of the incentives, iron ore prices rose sharply, reaching a three-month high of $110.55/t on October 7. However, on October 21, they fell to $104.21/t.

The risk to the rise in ore prices, the observer believes, is that significant volumes of imports will eventually be added to stocks, even if steel production begins to recover. Port stocks monitored by SteelHome consultants reached 147.2 million tons in the week to October 18. A week earlier, these volumes amounted to a five-month low of 145.8 million tons.

The increase in iron ore imports is in stark contrast to the decline in steel production, which fell for the fourth consecutive month in September, down 1.1% from August to 77.07 million tons. Over 9 months, this figure fell by 3.6% y/y – to 768.48 million tons. However, Russell notes that the rate of decline in steel production in the country has slowed down compared to the fall in August. A possible increase in volumes in the coming months depends on whether there is an increase in demand for steel in the country.

As GMK Center reported earlier, in 2025, China’s steel exports are expected to reach 90-100 million tons, compared to 110 million tons forecast for 2024. Despite the expected decline in exports, the figure will remain at record levels as local steelmakers struggle to cope with overcapacity and weak domestic demand.