China’s iron ore imports decreased for a second month in November, driven mainly by reduced restocking demand at steel mills due to narrow profit margins. Namely, China imported 86.25 million tonnes of iron, which is a decrease of 2.4% from October.
The globe’s top steel producer brought in 86.25 million tons of iron ore last month, down 2.4% from 88.4 million tons in October and down 8.8 5% from 94.54 million tons a year earlier, data from the General Administration of Customs showed.
According to Reuters, for the first 11 months of 2018, China’s imports of the steelmaking ingredient reached 977.89 million tons, slightly lower from the previous year which reached 991.26 million tons.
Because of low steel prices during high output levels since late October, profit margins at steel mills have fallen to the lowest in years, driving producers to rein in costs by using more low-grade iron ore and by reducing their input of scrap steel.
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Iron ore stockpiles at Chinese ports had fallen to a one-year low of 138.6 million tons as of December 7, while reserve at steel mills also decline to its lowest since early October.
Furthermore, analysts expect some steel mills that have higher production costs to reduce output by arranging more maintenance until steel prices recover.
Utilisation rates at steel mills across the country fell for a third week in a row to 65.88%, according to Mysteel data. However, it was higher than the 62.02% in the same period last year.
Vessel-tracking and port data gathered by Refinitiv indicates that China will only import about 66.42 million tons of seaborne iron ore in December.
