Iron ore import decreases in China
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According to statistics from the Ministry of Transport, China's ports discharged 56 million tons of iron ore in May, 2.5 percent less than that during the same month last year. This is the first time that the iron ore import decreased since 2009.
China Iron & Steel Association announced Wednesday that steel output has begun to decline after the price of steel fell for a month. The country's average daily steel output in May reduced by 20,000 tons, from 1.821 million tons in April to 1.805 million tons in May.
At present, some small steel factories in north China are reducing or limiting their output, but large steel plants are not prepared to do so. An anonymous staff member from a steel plant said that although the price of steel dropped dramatically, it would cause more losses if machines stop operating.
The negative growth of iron ore import in May was mainly due to the high-volume import last year and the increasing price this year.
But there is no doubt that the domestic steel output has to decline. The demand from the real estate and auto industries is falling, and the price of steel is decreasing. Also, the quoted price of iron ore from the three major iron ore mining companies continues to increase.
According to Xu Guangjian, an iron ore industry analyst from Umetal, the spot price of iron ore import dropped to US$150 per ton on Wednesday, but the domestic trading volume is still low. In fact, major domestic steel plants and traders have almost stopped importing iron ore for a few consecutive weeks. This caused the stockpile of iron ore to currently reach 73.76 million tons, very near to the record-high figure from September 2009.
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