China iron ore imports in June fall to lowest since Feb 2016

BEIJING (Reuters) - China’s iron ore imports in June fell from a year ago, touching their lowest since February 2016, customs data showed on Friday, as supply declined from top miners in Brazil and Australia.

Arrivals of the steelmaking raw material were 75.18 million tonnes last month, below both the 83.24 million tonnes imported in June 2018 and May’s 83.75 million tonnes, according to data from the General Administration of Customs on Friday.

For the first-half of the year, the world’s biggest iron ore consumer brought in 499.09 million tonnes of ore, down 5.9% from the same period a year ago, the customs data showed.

Supply from Brazil has fallen following the deadly rupture of a tailings dam in January. Elsewhere, Rio Tinto RIO.AXRIO.L, the world's largest iron ore miner, has cut its forecast for 2019 shipments from the Australian region of Pilbara due to operational problems.

The two countries are China’s largest iron ore suppliers.

Inventories of imported iron ore at Chinese ports fell to a 2-1/2-month low of 115.25 million tonnes by the end of June, according to data compiled by SteelHome consultancy. It rebounded slightly to 115.6 million tonnes last week.

“Iron ore supply may not see much improvement as some miners have scheduled maintenance in the coming months, while output from Vale is not likely to pick up largely in the near term,” said Richard Lu, analyst at CRU in Beijing.

Chinese demand for iron ore could ease as top steelmaking cities in China heighten anti-pollution measures, including trimming production at mills, as local officials face mounting pressure to meet air quality targets.

Utilization rates at steel mills across China fell to 66.02% as of Friday, the lowest since late March, data compiled by consultants Mysteel showed.

“With the top steel hub cutting output, mills in other regions may take the chance to ramp up production. In that sense, total iron ore demand in China may not fall too much,” said Lu.

Reporting by Muyu Xu and Shivani Singh; editing by Christian Schmollinger and Richard Pullin