Iron price gains as Chinese imports surpass 1 billion tonnes

Benchmark iron ore prices climbed on Tuesday after trade data showed Chinese imports of the steelmaking raw material topped 1 billion tonnes for the third year in a row as Beijing’s efforts to stimulate the economy pays off.

The Chinese import price of 62% iron content ore was pegged at US$97.03 per dry metric tonne, according to Fastmarkets MB, a more than four-month high. Iron ore prices averaged US$91.85 in December.

China’s iron ore purchases in December totalled 101.3 million tonnes, up nearly 12% from July and 17% from last year customs data showed, marking the highest level of imports since September 2018.

Full-year iron ore imports was the second-best on record at 1.069 billion tonnes, up 0.5% from last year and within shouting distance of 2017’s record 1.075 billion tonnes. Iron ore peaked in July last year, just shy of US$126 a tonne, the highest since January 2014, but declined over the summer months as fears of a shortage on the seaborne market receded.

The price of iron ore is up 30% following a dam burst at Vale’s Brumadinho project in Brazil in January 2019 that killed nearly 300 people. In response, the world’s number one producer initially suspended 93 million tonnes of output.

However, the Rio de Janeiro-based company managed to bring much of that capacity back online and ended the year with only a 5% drop in output to an estimated 310 million tonnes.

Before the disaster Vale was flagging strong growth with a medium-term target of roughly 400 million tonnes in annual production thanks to its US$14 billion S11D project that adds 95 million tonnes in new capacity.

This article first appeared in our sister publication, MINING.com.