China's Iron Ore Import Volume Fall Sharply
From the customs, China imported iron ore in June only 47 million tons
, which decreased sharply compared with last year. This is the third consecutive months of iron ore import decline.
China as the largest iron ore import country, so iron ore import decline has affected the growth in China's foreign trade, import from April has continued declined.
In march, the import volume reached high point 59 million tons, after that iron ore import volume began declind month by month. April, May or June this three months of import volume, no matter compared with last month or last year, were decreased dramatically.
SGIS SONGSHAN CO.,LTD. in June or July, this two months has entirely stopped iron ore purchase. The company said, in order to control the inventory, steel products has been adjusted reduction of output, the production don't need so many iron ore.
Earlier reports said, before July 20 days, the Chinese steel industry association member, 40% of the member enterprises have been cut and maintenance.
According to the Lange steel information research center statistic that steel production enterprise overhaul in July larger than June, steel processing enterprise has twenty-two enterprises reduced output, the quantity about 1.4 million tons, estimating effect of crude steel output down 0.6 million tons.
This year march to may, steel industry had a sharp decline in stock, adjust considered industry to the transition from the conventional peak season to inventory. But the industry is not expected that from the middle of July, steel stock began to drop unconventional.
In the iron and steel production volume growth situation, the whole society has presented supply exceed demand situation, and promote domestic steel market price from rise to down, and with steel production cost rise, some enterprise benefit was obviously declind and even losses.
According to the report, the steel association for iron ore markets earlier this year, rising prices of steel prices triggered high expectations, so that make first half year of China's crude steel production year-on-year increased more than 20%, equivalent to 650 million tons of annual crude steel level.
In the downstream, the demand in slow trend. After the financial crisis, the government economic stimulus policy withdraw, the whole society fixed assets investment gradually growth cause China's crude steel consumption performance continued slowdown in recent months.
Because of the iron ore annual pricing mechanism is replaced by quarter pricing model, after two consecutive quarters adjusted iron ore price, iron ore CIF price was around 190 U.S dollar per ton. Accordingly, the price of steel products in China has not synchronous improved.
As steel enterprise reduced purchase, iron ore's spot price from April 190 U.S dollar per ton, continued drop to current 130 U.S dollar per ton.
In this context, some steel enterprises consider using relatively cheap homebred ore to supplement. According to figures released just steel association, domestic ore mines produced 485 million ton, year-on-year increased 28%.
It is expected that in July and August, China's iron ore imports will still maintain the deficiency in June low level 50 million tons. But in the fourth quarter, because of excessive consumption of inventory, iron ore import will restart.
by: Amanda Xia
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