China’s iron-ore imports rose in April by 20pc from April 2019 and by 13pc from March 2020 to 92.27mn mt. Imports rose as manufacturing activity in the country gained momentum. Blast furnace capacity utilisation rate rose to 79pc in April from 73pc in the month prior.
In April, China’s domestic demand remained strong. Most downstream industries, including the auto sector in the virus epicentre Hubei province resumed activities by mid-March. In late March, Baowu group subsidiaries in Wuhan, Wuhan Iron & Steel and Echeng Iron & Steel also resumed operations at 100pc and 90pc capacity levels, respectively.
China also bought billets from overseas markets. While some market participants feel this increased billet demand was driven by rising domestic downstream activities, others believe the largest world steel producer was stocking up inventories as steel prices were under pressure. In the coming months, steel products from China are likely to flood global markets. Amid such fears, countries like Mexico, South Korea, USA, Chile and many others have started dumping probes or sunset reviews for already existing duties. European Union also looks to safeguard its domestic steel industry through restricting steel import volumes.
China changes iron ore import inspection rules
Over 60pc of China’s iron ore imports come from Australia. Effective June, imported iron ore inspection rules are set to change according to media reports. The customs department will do away with the mandate of inspecting all iron ore imports. Instead, inspections would be conducted only at the importer’s behest. The move has been hailed by BHP, a major global miner.