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UPDATE 1-China Jan iron ore imports surge to record 86.84 mln T - customs
February 12, 2014 / 3:26 AM / 4 years ago

UPDATE 1-China Jan iron ore imports surge to record 86.84 mln T - customs

* Iron ore imports defy analyst expectations to rise 18 pct on month

* Surge reflected in rapid increase in port stockpiles

* Import increase not reflected by underlying demand (Adds analyst quotes, details of data)

BEIJING, Feb 12 (Reuters) - China’s imports of iron ore surged to a record 86.84 million tonnes in January, defying analysts’ expectations to rise more than 18 percent from the previous month, data from China’s customs authority showed on Wednesday.

The figure was also a third higher than the same period of last year and exceeded the previous record set in November by 11.6 percent.

Analysts expected shipments to China, the world’s biggest iron ore consumer, to have fallen over January, with prices declining to a six-month low in the month amid growing uncertainty about demand in the country’s steel sector.

The big increase is unlikely to have been driven by underlying demand from the country’s massive steel sector, which has been struggling with weak demand, a lack of credit and a drive by Beijing to clean up the environment.

“These figures are certainly higher than we previously expected - not all of these commodities will have been consumed by downstream industry and this is reflected in the very high inventories of iron ore at Chinese ports, which are at their highest level since September 2012,” said Judy Zhu, metals analyst with Standard Chartered Bank in Shanghai.

Iron ore stocks at major Chinese ports SH-TOT-IRONINV currently stand at 97.25 million tonnes and have risen 23 percent since late October.

Crude steel output inched up to 2.007 million tonnes a day in mid-January, the last figures available from the China Iron and Steel Association, but it remains substantially lower than the record of nearly 2.2 million tonnes set last May.

Zhu said imports could see a sharp decline in February.

“This is a terrible number because it would mean importers, mostly traders, might now slow down their buying activity on the international market which might be translated into negative pressure on prices, as we have seen over the last week or so.” (Reporting by David Stanway; Editing by Richard Pullin and Muralikumar Anantharaman)

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