China Iron Ore Imports Head for Record Even as Steel Output Slips

SEATTLE (Scrap Monster):   China is on track to import record volumes of iron ore in October, increasing the divergence between the demand for the steel raw material and the still weak output of the finished product.

China, which buys almost three-quarters of global seaborne iron ore, is likely to import as much as 120 million metric tons this month, according to vessel-tracking and port data.

This would be a strong rise from the official customs number of 104.1 million tons in September, and also represent an all-time high, eclipsing the previous record of 112.7 million in July 2020.

 The strength in iron ore imports stands in sharp contrast to the softness in steel production, which slid for a fourth consecutive month in September, dropping to 77.07 million tons, down 1.1% from August and 6.1% from the same month in 2023.

China's steel output for the first nine months of the year was 768.48 million tons, down 3.6% from the same period in 2023, according to data released by the National Bureau of Statistics last week.

 If there is a positive from the September steel production data, it's that the pace of decline slowed from the 10.4% on-year drop in August.

Whether the drop in steel output can be lifted to show an increase in the next few months largely depends on whether steel mills see rising demand on the back of Beijing's stimulus efforts.

September was too early for any kick higher in steel demand, given the major stimulus announcements were just before month end.

However, if the measures to boost the ailing property sector do bear fruit, it's likely to only result in an increase in actual demand in 2025.

This makes the rush to buy more iron ore seem somewhat premature.

 October's imports are on track to reach 120.5 million tons, according to data compiled by commodity analysts Kpler, while LSEG analysts expect arrivals of 117.3 million tons.

It's likely that steel mills and traders took heart from the stimulus efforts announced by Beijing, but lower spot prices for iron ore may also have boosted buying.

Courtesy: www.reuters.com