[SMM Iron Ore Imports Analysis] Iron ore imports up 15% in June; off-season in July may see a MoM contraction

According to the latest statistics from the General Administration of Customs, China imported 112,689 kt of iron ore and concentrates in June, up 14,978 kt MoM, a 15.3% MoM increase. Cumulative imports of iron ore and concentrates in January-June reached 628,868 kt, up 6.3% YoY.

Looking back at June, the pattern of strong supply and weak demand for iron ore gradually emerged. On the supply side, shipments and port arrivals rebounded MoM multiple times during the month. Although port inventory experienced a brief slight destocking mid-month, the destocking speed slowed at month-end, and the overall assessment of relatively loose supply persisted throughout the month. On the demand side, hot metal output briefly rebounded at the start and middle of the month, but from late June onward, as steel mill profits were squeezed and blast furnace maintenance intensified, pig iron production reached an inflection point and was expected to continue weakening, keeping the overall fundamentals of iron ore bearish. However, given that June had more working days than May, the statistics may have reflected a MoM increase in iron ore imports in June.

Looking ahead to July, downstream demand in China's steel industry chain continued to decline amid the off-season, while demand in markets outside China weakened simultaneously. The combined impact of domestic and international conditions drove China's pig iron production to a downward inflection point, and overall iron ore demand began to weaken. Moreover, July is traditionally the off-season for iron ore shipments, and iron ore mines generally opt to reduce shipments to stabilize market prices under such conditions. Therefore, considering fundamental supply and demand, China's iron ore imports in July are expected to decline MoM.