Chinese iron ore import price climbs to record high, containment measures expected
Cranes unload imported iron ore on Sunday at the port of Lianyungang, in eastern China’s Jiangsu province. In September, the port’s iron ore throughput exceeded 6.5 million tonnes, a new record for the year, making it a major port for iron ore imports into China. Photo: VCG
China’s iron ore imports remained strong from January to April, with import volumes increasing 6.7%, supported by resilient demand after production resumed, causing the price to rise significantly (58, 8%) at 1,009.7 yuan ($ 156.3) per tonne, remaining at a high level. level. Meanwhile, the average price of imported iron ore for the month of April alone hit $ 164.4, the highest since November 2011, according to data from the Beijing Steel Information Research Center. Lange.
As China’s demand for iron ore plays an important role in increasing the volume and price of imported iron ore, experts said the high price should be alleviated with the diversification of sources of supply and processing. towards green energy.
The jump in the price of raw materials has been happening since last year, ignited by the growth in steel production after the epidemic was well contained in China. According to statistical data, in the first quarter, China’s production of pig iron and crude steel reached 220.97 million tons and 271.04 million tons, an year-on-year growth of 8.0 and 15 , 6%, respectively.
Due to resilient demand, the average price of iron ore imports in April was $ 164.4 per tonne, up 84.1% year-on-year, according to calculations by the Beijing Lange Steel Information Research Center. .
Meanwhile, other factors such as capital speculation and the high concentration of global supplies have also fueled the price spike, intensifying cost pressure on the domestic steel industry, experts said.
More than 80% of China’s iron ore imports are concentrated in the hands of four large foreign miners, with Australia and Brazil together accounting for 81% of China’s total iron ore imports, according to media reports.
Among them, Australia absorbs more than 60 percent of the total amount of iron ore imports. Although they fell 7.51 percentage points from 2019 after the Chinese steel industry’s efforts to diversify its sources of supply, they remained in a dominant position.
However, experts believe that the upward trend in prices is likely to weaken as the industrial structure changes in China, the world’s largest iron ore consuming market.
China removed tariffs on some steel products and raw materials from May 1, as part of efforts to reduce iron ore consumption amid soaring prices.
The new policy, along with accelerated mining efforts both at home and abroad, will effectively help reduce the amount of imported iron ore and keep high prices under control, said Ge Xin, an expert from industry, to the Global Times.
But with uncertainties remaining, experts believe price easing would be a long-term process.
Under the suspension of the dialogue mechanism between China and Australia, the superposition of global inflation, as well as the expansion of foreign demand under rising steel prices, the future price of iron ore will meet More uncertainties, Wang Guoqing, research director at the Beijing Lange Steel Information Research Center, told the Global Times on Friday, indicating that the high price would not be alleviated in the short term.