Iron ore imports might be sustained in China despite economy

Launceston, Australia — A swathe of poor economic data in China is putting pressure on the price of iron ore, which is struggling to hold above the key psychological level of $100 a tonne.

However, the run of soft indicators in China’s embattled property sector has yet to translate into a significant decline in the volume of imports of the main raw material used to make steel.

Commodity analysts Kpler and Refinitiv are estimating that August imports will top 100-million tonnes, which would be the first time this has happened since March's customs figure of 100.23-million tonnes.

Kpler is estimating that China, which buys about 70% of global seaborne iron ore, will see imports in August of 108.5-million tonnes, while Refinitiv has a more conservative 100.8-million tonnes.

While these figures are likely to be revised as more cargoes are assessed, it is likely that iron ore imports will rebound from July's official 93.48-million tonnes, which was the lowest since April.

It is likely that the lower spot prices for iron ore in recent weeks are encouraging traders and steel mills to boost imports. It is also the case that there is still optimism that Beijing will boost stimulus measures to shore up not only the property sector, but also other steel-intensive industries such as manufacturing and infrastructure.