China November iron ore imports down for second month as top miners ship less

BEIJING (Reuters) – China’s iron ore imports fell for a second straight month in November, customs data showed on Sunday, as lower shipments from top miners in Australia and Brazil overshadowed firm demand for the steelmaking ingredient at mills.

The world’s top steel producer brought in 90.65 million tonnes of iron ore last month, down 2.4% from 92.86 million tonnes in October and compared with 86.25 million tonnes a year earlier, data from the General Administration of Customs showed.

For the first 11 months of 2019, iron ore arrivals reached 970.69 million tonnes, down 0.7% on an annual basis.

Data from Australia’s Port Hedland showed it shipped less iron ore to China in October, down 0.7% from a month earlier.

Brazilian miner Vale (VALE3.SA), meanwhile, has halted production at various mines after a deadly dam collapse in early January and has forecast a near 15% sales drop in 2019.

“Miners (in Australia) are undergoing maintenance after a strong financial year,” Darren Toh, an analyst with Tivlon Technologies, said before the data was released.

The softening of Australian shipments coincided with wet weather conditions kicking in Brazil, he added.

Inventories of imported iron ore at Chinese ports fell to 129.4 million tonnes by the end of November, logging the first monthly drop in five.

Despite seasonal factors, analysts remained optimistic about iron ore demand in coming months as profits recovered at Chinese mills after a pick up in construction in November.

“The profit (for mills) is at about 600-700 yuan ($85-$99) per tonne now, which is pretty good and could help lift iron ore demand and prices,” said Zhao Yu, analyst with Huatai Futures.

More infrastructure projects are also expected to start up after the Chinese Lunar New Year, Tivion’s Toh said.

Utilization rates at China’s steel mills rose to 65.88% by end-Nov, up from 63.54% from the end of the previous month, data compiled by Mysteel consultancy showed.