Worries about an economic slowdown in China—the world’s number one commodities consumer—have put a damper on metals and minerals prices this year.
But customs data released in China over the weekend seem to indicate those fears are overblown.
China forges almost as much steel as the rest of the world combined and to meet the demand for steelmaking raw material China’s iron ore imports surged to a fresh record in September.
China imported a new all-time high of 74.58 million tonnes of iron ore during September, up 8% from August and up a surprisingly robust 15% compared to last year.
China has continued to produce steel at a record pace, upping the rate by 100,000 tonnes in September to 2.14 million tonnes per day (and up close to 8% compared to the first eight months last year), showing demand in the world’s second-largest economy is not as slack as many observers believe.
China imports the bulk of its iron ore and that number is growing as the new Chinese leadership opens up the industry to market forces and highly fragmented domestic producers continue to struggle with high mining costs and low-quality ore.
Iron ore stockpiles at major Chinese ports have been rising slowly but steadily in recent months but last week declined slightly to reach 73.3 million tonnes.
These levels only represent around 60% of monthly consumption by the country’s steel industry and are historically near record low levels which averaged around 100 million tonnes during the first half of last year.
The price of iron ore has defied expectations of a slump in 2013 and on October 11 the benchmark CFR import price of 62% fines at the port of Tianjin climbed to $133.10 a tonne, up from its 2013 low of $110 a tonne reached in May.
Copper imports reversed declines suffered earlier in the year, rocketing 18% to hit 457,847 tonnes in September, the highest since March 2012, thanks to a decline in high levels of warehouse stocks.
China consumes some 42% of the world’s copper trade and bonded warehouse stocks have declined more than 60% since hitting a high of one million tonnes at the beginning of 2013.
Total imports of copper in the June-to-September quarter rose 21.4% over the second quarter to 1.26 million tonnes, according to customs data.
Copper futures were priced at $3.21 a pound on October 11, down 11.8% since this time last year.
Reprinted by permission of Mining.com