Why did Iron Ore Imports Decline Sharply in the Peak Season in March? It is Expected to Increase Obviously in April

SHANGHAI, Apr 13 (SMM) - According to the data from the General Administration of customs, China imported 87.283 million mt of iron ore and concentrate in March 2022, a month-on-month increase of 1.56% and a year-on-year decrease of 14.52%. From January to March 2022, the iron ore and concentrate imports totalled 268.36 million mt, a year-on-year decrease of 5.2%. 

March is the traditional peak season of steel production. However, China’s iron ore demand has decreased significantly due to multiple factors. 

The first is the holding of the Winter Olympic and Paralympic games. Environmental protection and production restriction were implemented in Beijing, Tianjin and Hebei on March 3-13, so that the operating rate of blast furnace was restrained. Besides, due to the multi-point outbreak of the domestic pandemic, Shandong, Jilin, Hebei and other places were closed for control, and the traffic problem resulted in difficulties in the entrance of raw materials and the exit of finished products in some steel mills, and many blast furnaces were closed and shut down. The downstream demand for steel was weak, the production enthusiasm of steel mills was modest, so that the demand for iron ore fell sharply year-on-year. 

In addition, since late-January, the prices of domestic iron ore have risen abnormally, and the relevant domestic departments have issued a voice for control. The domestic spot and future prices and the abroad prices were reversed, so that steel mills and traders mostly purchase port spot.  

With the improvement of the domestic pandemic situation, Tangshan, an important iron and steel town has been unsealed. In addition, relevant departments also put forward new implementation policies for logistics. The production of steel mills will gradually return to the normal level, driving the sharp rise in iron ore demand. It is expected that the imports of iron ore will increase significantly in April.