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UPDATE 1-China's Feb iron ore imports fall to 4-month low-customs
March 8, 2013 / 3:36 AM / 5 years ago

UPDATE 1-China's Feb iron ore imports fall to 4-month low-customs

* Feb imports down 14 pct on month, off 16.2 pct on year

* Second straight monthly fall after record high in Dec

By Ruby Lian and Fayen Wong

SHANGHAI, March 8 (Reuters) - Iron ore imports by top consumer China fell 14 percent in February from the previous month to a four-month low of 56.42 million tonnes, customs data showed, as the Lunar New Year holiday slowed shipments and high prices curbed appetite.

Compared to a year ago, February’s imports were down 16.2 percent. Total imports in the first two months of the year, which strips out the holiday distortions, were down 1.5 percent from year ago at more than 120 million tonnes, according to data issued by the General Administration of Customs on Friday.

The second straight monthly fall in imports comes after shipments jumped to a record high of 70.94 million tonnes in December as steel mills with low inventories stepped up purchases on hopes a brighter economic outlook would boost steel demand.

That surge in imports, which have brought total arrivals to nearly 200 million tonnes since December, have also sent iron ore prices soaring by a third since end-November to above $150 a tonne in February.

“When iron ore prices reached above $150 a tonne, steel mills have changed their behaviour. They have become quite cautious about buying iron ore in large volumes and they would rather keep their inventory low,” said Henry Liu, head of commodity research at Mirae Assets Securities.

The one-week Lunar New Year holiday in mid-February and supply disruptions caused by a cyclone in Australia also contributed to the fall in iron ore imports, traders said.

The China Iron & Steel Association has forecast the country’s iron ore demand to rise 5.7 percent this year to 1.11 billion tonnes and steel demand to climb 4.1 percent to more than 666 million tonnes.

China’s average daily crude steel output rose 1.4 percent to 2.034 million tonnes in the last eight days of February from the preceding 10 days, the highest since mid-May 2012, industry data showed. (Editing by Muralikumar Anantharaman)

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