UPDATE 1-China's July iron ore imports hit record high
* July imports reach 73.14 mln T, up 17 pct on month
* Steel demand still resilient, iron ore restocking strong
By Ruby Lian and David Stanway
SHANGHAI/BEIJING, Aug 8 (Reuters) - China's iron ore imports surged to a record high in July as domestic buyers replenished their inventories to meet surprisingly resilient steel demand during the summer.
Imports of iron ore jumped to 73.14 million tonnes, up 17 percent from a four-month low of 62.3 million tonnes in June, customs data showed on Thursday.
Analysts were surprised by the extent of the climb, especially after export figures from Australia's Port Hedland showed a slight decline over the month.
"It's really big - shipments from Australia weren't actually that good and I would think it has something to do with the fact that the June number was low and there was some catch-up tonnage coming through," said Graeme Train, analyst with Macquarie in Shanghai.
But the data also reflected healthy underlying demand in the Chinese steel sector, by far the world's biggest, despite persistent complaints about oversupply and weak prices.
"The steel market looks really healthy - demand has clearly beaten everyone's expectations," said Train.
"The consensus is that there will be a slowdown in the second half but we are seeing steel destocking continuing so there are no obvious signs the market is out of balance at this stage, and any slowdown will be a lot more moderate than people expect."
Chinese steel mills maintained strong run rates as their orderbooks improved, boosting appetite for iron ore and driving up spot prices of the raw material .IO62-CNI=SI by 12 percent to above $130 a tonne last month.
"Chinese steel mill margins have improved in July so they have ramped up production, boosting appetite for the raw material," said Judy Zhu, analyst with Standard Chartered Bank in Shanghai.
Zhu expected the average iron ore prices to stand at $127 a tonne in the fourth quarter.
Iron ore imports beat the previous record of 70.94 million tonnes hit in December 2012.
Traders expect iron ore shipments to China to remain high in August as mills made more bookings to meet stronger demand. Average daily crude steel output has remained at above 2.1 million tonnes since April.
China's economic watchdog expects steel output to touch a record high of 780 million tonnes this year, up 9 percent from last year.
While a slowdown in steel demand is expected in the second half, it is unlikely to have a big impact on iron ore demand, or prices, said Train.
"They will need to at least maintain those inventories and that swing in purchasing activity means that iron ore demand is actually a lot better than people are expecting, and the risk of a serious decline in iron ore prices is very limited at the moment."
Total iron ore imports stood at 457.2 million tonnes for the first seven months of this year, up 8 percent from a year ago, data from the General Administration of Customs showed.
Chinese steel exports eased back to 5.15 million tonnes last month from 5.29 million tonnes in June, and the total exports stood at 35.8 million tonnes, up 14 percent from the same period of last year.
Imports of steel products to China rose to 1.18 million tonnes from 1.08 million tonnes in June, bringing the total shipments to 8.01 million tonnes for January-July, almost steady from a year ago. (Editing by Joseph Radford)
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