By Anil Mathews (ScrapMonster Author)
December 18, 2015 02:19:46 AM
BEIJING (Scrap Monster): The latest trade statistics released by the China Iron and steel Association (CISA) indicates that Chinese iron ore import volumes surged higher by over 15% in November this year to 105.6 million mt. This is when compared with the imports during the previous month.
The number of Chinese companies importing iron ore increased to 545 in November when matched with 527 importing companies in October. According to CISA, the pessimism surrounding the market has lessened during Nov ’15, as major mills reported restocking of the raw material.
The iron ore exports to the country from Australia and Brazil rose significantly during the month. The share of iron ore imports from these countries increased from 84% in October to 86% in November. The imports of medium to lower grade ores with 55-63% Fe grade totaled 50.8 million mt in November, higher by over 11% when compared with the previous month. The supply of 63% Fe grade ore from Brazil surged by nearly 47% month-on-month to total 11.4 million mt
The iron ore imports during the current month are expected to remain at lower levels, due to cash-flow crisis faced by many steel mills. CISA warned iron ore importers to be cautious as steel mills in the country may resort to production halts or shutdowns on account of year-end credit crunch. The Association expects market conditions to improve during the next year. However, the situation remains unpredictable, it adds.
Meantime, the latest commodity research report published by Macquarie states that iron ore prices under $40 per tonne CFR China are likely to be short-lived as the country’s economic growth is likely to gain momentum after the Chinese New Year holidays in February 2016. The firm foresees substantial pick up in iron ore demand growth, due to anticipated ramp-up in steel production post-Chinese New Year.