SHANGHAI, Oct. 14(SMM) -- According to latest data from China Customs, China’s imports of iron ore in September were 60.57 million mt, up 2.5% MoM and up 15.15% YoY. China’s imports f iron ore from January to September were 509 million mt. The import surge in September is mainly attributed to the following two reasons.
First, under the expectation that demand for iron ore would increase during the traditional peak-demand season in September and October, traders increased orders for iron ore for delivery in September.
Second, affected by the European debt crisis, some European steel mills began to cut output. CEO Karl-Ulrich Köhler of Tata, the second largest steel mill in Europe, said that Tata Europe Company would consider cutting output if orders continue to be weak in the following few months. It was reported that capacity utilization rate at Tata Europe company was 80-85%, lower than 85-90% in 1H 2011. Part of the iron ore surplus caused by output cut in Europe diverted to China, contributing to China’s higher iron ore imports in September.
Steelease believes that China’s imports of iron ore in October will wane to great extent. The reasons are as follows:
First, some steel mills already reported losses. In addition, some large steel mills strengthened efforts for unit maintenance, following an incident at Nanjin Iron and Steel during the National Holiday period. Anshan Iron and Steel conducted unit maintenance for a 3,000 cubic meters blast furnace, and Baosteel also arranged unit maintenance for a unit furnace.
Second, some domestic iron ore traded stopped to import iron ore, and most of them reporting high inventory level. They believed that iron ore demand may not be optimistic in Q4 and the Q1 in the following year, so they will not consider importing iron ore.