[SMM Iron Ore Import Analysis] June iron ore imports rose 15% MoM; July off-season may continue decline MoM

According to the latest data from the General Administration of Customs, China imported 112.689 million mt of iron ore and concentrates in June, up 14.978 million mt from the previous month and up 15.3% MoM. In January-June, imports of iron ore and concentrates totaled 628.868 million mt, 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 inventories briefly destocked slightly mid-month, the destocking speed slowed at month-end, and the assessment of overall ample supply persisted throughout the month. On the demand side, hot metal output once picked up early in the month and mid-month. However, from late June, as steel mill profits were squeezed and blast furnace maintenance increased, pig iron production reached an inflection point and is expected to continue weakening. Iron ore fundamentals continued their bearish pattern. However, considering that June had more working days than May, the statistical approach may partly reflect the MoM rise in iron ore import volumes in June.

Looking ahead to July, downstream demand in China's steel industry chain continues to fall amid the off-season. Meanwhile, demand in markets outside China is also weakening in tandem. The combined dynamics in and outside China are leading to a downward inflection in domestic pig iron output, and overall iron ore demand is beginning to weaken. In addition, July marks the traditional off-season for iron ore shipments. In the off-season, iron ore mines generally opt to reduce shipments to stabilize market prices. Therefore, considering supply-demand fundamentals, China's iron ore imports in July are expected to decline MoM.