According to the statistics of the General Administration of Customs, in December 2020, China imported 96.746 million tons of iron ore, with a month on month decrease of 1.404 million tons or 1.4%; the average price was 121.4 $/T, with a month on month increase of 1.3 121.4 $/T or 1.1%. In 2020, China will import 1170.1 million tons of iron ore, an increase of 96.746 million tons, or 9.5%.
In 2020, the volume and price of China's imported iron ore will also rise. At the same time, the annual import volume will jump to 1.1 billion tons for the first time.
Chen Kexin, an analyst at Lange Steel, believes that the volume and price of China's imported iron ore will rise in 2020, mainly because of the following three reasons:
Firstly, the stable growth of China's steel production and strong demand for iron ore. Statistics show that from January to November 2020, the domestic output of crude steel, pig iron and steel are 96.116 million tons, 81.29 million tons and 120.03 million tons respectively, with a year-on-year growth of 5.5%, 4.2% and 7% respectively; the iron and steel enterprises are actively increasing production and the steel output is constantly accelerating, which is bound to produce strong consumption demand for iron ore, especially high-grade imported iron ore.
Secondly, the early inventory is relatively low, resulting in a huge demand for replenishment. In 2020, the import volume of more than 1.1 billion tons of iron ore is not only driven by strong steel production demand, but also due to the huge demand for replenishment this year. According to analysis, China's iron ore imports remained low for several consecutive years, which cannot match the rapid growth of iron and steel production in the same period. As a result, China's high-grade iron ore inventory was lower than a reasonable level, thus stimulating more iron ore imports this year.
Thirdly, the depreciation of the US dollar has pushed up the import cost of iron ore. Since the beginning of this year, due to various factors, the US dollar has depreciated significantly. The significant depreciation of the US dollar has stimulated the rise of iron ore prices in the international market and correspondingly pushed up the import cost of China's iron ore, which has become an important monetary factor affecting domestic iron ore prices in addition to supply and demand.
- [Editor:Catherine Ren]