BEIJING (Reuters) - China’s iron ore imports dropped 11.6 percent in June from the previous month, customs data showed on Friday, hit as Beijing intensifies its push to clean up the country’s environment and by mounting stockpiles at ports.
Arrivals into the world’s top importer of the steelmaking material reached 83.24 million tonnes last month, according to the General Administration of Customs, down from May’s 94.14 million tonnes and from 94.7 million tonnes in June last year.
Imports for the first-half of 2018 dipped 1.6 percent from the year before to 530.69 million tonnes, the data showed, curbed by wide-ranging steel production restrictions in the first three months.
Iron ore stockpiles at Chinese ports stood at 156.38 million tonnes last week, not far from a record 161.98 million tonnes in early June, data compiled by SteelHome consultants showed. Last week’s level is nearly 40 percent higher than the five-year average of 113.45 million tonnes.
Month-long environmental inspections in 10 regions across China, including top steelmaking province Hebei, dented appetite for iron ore in June.
Crude steel output at major steel companies last month reached 59.3 million tonnes, down from 61 million tonnes in May, according data from China’s Iron & Steel Association (CISA).
“Iron ore demand may be further suppressed by environmental measures in the coming months,” said Zhuo Guiqiu, analyst at Jinrui Futures.
On Wednesday, Tangshan, the biggest steelmaking city in northern China, ordered steel mills, coke producers and utilities to cut output further for six weeks from July 20 until Aug 31 to clear its smoggy sky.
The sintering process, where iron ore is heated into a mass as a precursor to making hot metal, and blast furnaces are expected to be major targets in curbing pollution. Analysts expect up to 150,000 tonnes of hot metal output to be affected.
Industrial plants in the Beijing-Tianjin-Hebei region may also face more stringent environmental measures as China’s cabinet has launched a new cross-ministerial leadership group, headed by vice-premier Han Zheng, to help draw up plans to tackle air pollution in the area.
“Utilisation rates at mills have reached a relatively high level and it is hard for those who are exempted from the environmental crackdown to improve output,” said Zhuo.
Weekly utilization rates at blast furnaces across China had reached 70.86 percent as of Friday, not much lower than the 8-month peak level of 71.96 percent in late May, data from Mysteel consultancy showed, as seasonal maintenance at mills kicked in.
Reporting by Muyu Xu and Josephine Mason; Editing by Joseph Radford