China August iron ore imports slide on steel rout, soft demand outlook

BEIJING (Reuters) - China's iron ore imports in August fell 1.38% from July and slipped 4.73% from a year earlier, customs data showed on Tuesday, as falling steel prices and a gloomy demand outlook dampened buyers' appetite.

China, the world's largest iron ore consumer, brought in 101.39 million metric tons of the key steelmaking ingredient last month, according to data from the General Administration of Customs.

That compared with 102.81 million tons in July and 106.42 million tons in the same month in 2023.

Panic selling triggered by new requirements for steel quality hurt sentiment in the world's largest steel market, prompting many steelmakers to cut output, which dented their appetite for raw materials including iron ore, analysts said.

"An increasing number of domestic steel mills started equipment maintenance from July after persistently falling steel prices left them little room to make a profit," said Chu Xinli, a Shanghai-based analyst at China Futures.

"Moreover, steelmakers became more cautious about booking sea-borne cargoes amid lingering high portside stocks and a lack of confidence in demand prospects in the peak construction season; negative import margins also suppressed speculative buying interest," Chu added.

Inventories at major ports stood at 150.8 million tons by the end of August, 17% higher than the year-earlier level despite a 0.7% drop month-on-month, data from consultancy Steelhome showed.

Also, shipments from some miners slowed down in July after having caught up with quarterly targets, resulting in lower arrivals in China in August, according to analysts.

China's iron ore imports totaled 814.95 million tons in the first eight months of 2024, a year-on-year rise of 5.2%, the data showed.

Monthly iron ore imports may hover around 100 million tons for the reminder of the year, said analysts, pointing to a global supply glut.

STEEL TRADE

China shipped abroad 9.5 million tons of steel products in August, up 21.33% from July and 14.73% from a year before, as tepid domestic demand and fear of mounting trade frictions ahead encouraged rush sales, according to analysts.

Exports in the first eight months of the year jumped 20.6% to the highest for the period since 2016 at 70.58 million tons. That has brought an annualized volume at 106 million tons.

China imported 509,000 tons of steel products last month, up 0.79% from July while it was down 20.47% from a year earlier, with the January-August total at 4.63 million tons, an 8.4% annual drop.