BEIJING/MANILA (Reuters) - China’s iron ore imports rose 5.5 percent in May from a year earlier, recovering from a six-month low in April, as mills in the top steelmaking nation scooped up more raw material as they posted strong profits.
Imports of iron ore last month reached 91.52 million tonnes, according to data from the General Administration of Customs on Thursday, up from 86.75 million tonnes a year ago and April’s 82.23 million tonnes, the lowest since October 2016.
Analysts said the total was still near historical highs as mills continue to produce large volumes of steel to take advantage of decent margins.
“Profitability at steel mills was good in May especially for rebar producers,” said Wang Di, analyst at CRU consultancy in Beijing.
“I don’t think there will be a slump in iron ore imports going forward because while inventory at ports is very high, inventory at mills is relatively low.”
Last month, Chinese iron ore futures DCIOcv1 plunged 15 percent for their worst monthly performance in more than a year, with investors liquidating long positions amid worries about slowing construction and infrastructure demand.
“While steel prices have come off their recent rally, and we think are set for further declines, iron ore prices could see a short-term stabilization before easing in the second half of the year,” Barclays Capital analysts in a recent research note.
Stockpiles of imported iron ore at China’s major ports remain close to 13-year highs.
Steel consumption typically eases during the summer months in the north of the country along with construction activity.
Imports of steel products rose 2.8 percent to 1.11 million tonnes in May from April. Exports rose 7.6 percent to 6.98 million tonnes.
Reining in excessive local government debt and the shadow banking sector in China has been high on the central government’s agenda, leading to concerns that tighter liquidity will affect completion of some large infrastructure projects.
Reporting by Josephine Mason in BEIJING and Manolo Serapio Jr in MANILA; Editing by Tom Hogue