SHANGHAI (Reuters) - China’s iron ore imports rebounded in November to one of the highest levels on record, with appetite in the world’s top buyer remaining strong even as Beijing forced steel mills to slash output as part of its war on winter smog.
Shipments of the steelmaking material rose 18.9 percent to 94.54 million tonnes in November from the previous month and were up 2.8 percent from a year ago, data from the General Customs of Administration showed on Friday. That was the fifth highest on record.
Total arrivals for the first 11 months climbed 6 percent to 990.73 million tonnes from 935.08 million tonnes a year ago. That puts the country on track to top last year’s import record of 1.02 billion tonnes.
Output cuts by Chinese steelmakers have led to tighter supplies, pushing steel prices to multi-year highs and driving up prices of iron ore as mills and trades restock in anticipation for steel production recovery after March.
“This was partly driven by increased exports from Brazil because there’s a production ramp-up there from Vale’s VALE5.SA mines,” said Helen Lau, an analyst with Argonaut Securities in Hong Kong.
“Given that iron ore prices have been recovering, you should expect Brazil to take advantage and export as much as they can,” she said.
She said traders may also have started to accumulate inventory while prices were falling in anticipation of a ramp-up in demand once mills resume full operations after the stringent winter restrictions across the north are lifted in March.
Shanghai steel futures SRBcv1 rose 9.7 percent in November, while iron ore prices DCIOcv1 surged 16.5 percent over the month.
China’s iron ore demand is expected to climb 1.3 percent in 2017 to 1.122 billion tonnes, but dip 0.2 percent to 1.12 billion tonnes in 2018, according to a report published by China Metallurgical Industry Planning and Research Institute (MPI) on Monday.
China’s crude steel output is expected to grow 3 percent to 832 million tonnes this year, and by a further 0.7 percent in 2018.
China’s steel exports fell sharply to 5.35 million tonnes in November from 8.12 million tonnes a year ago. Year-to-date exports fell 30.7 percent to 69.83 million tonnes on-year, customs data showed.
Steel imports rose to 1.14 million tonnes from 0.95 million tonnes in October, but total January-November imports stood almost steady at 12.1 million tonnes compared with 12.02 million tonnes a year ago.
Reporting by Ruby Lian in SHANGHAI and Manolo Serapio Jr in MANILA; Editing by Joseph Radford