Chinese iron ore import in May down by 6 pct while steel exports increase.

Reuters reported that China iron ore imports fell 6% to 51.9 million tonnes in May from the previous month while steel product exports rose 15% from April.

Chinese customs said recently iron ore imports were 3% lower from a year earlier, but took the year to date imports to 262 million tonnes up by 8.4%YoY.

Iron ore imports have started to fall after hitting an annual record of 59 million tonnes in March, while stagnant steel prices and possible large cutbacks in steel mill production could further squeeze imports over next few months.

An iron ore trader based in Ningbo said "Most of the deals were signed in March or early April when prices were still high and buying was active, but orders have dramatically fallen in May after prices plummeted. The Indian monsoon will also have a big impact on iron ore imports in the summer."

Spot iron ore prices slumped by more than 25% from the all time high of around USD 200 per tonne in late April. Smaller Chinese steel mills and traders have spurned imported ore amid fluctuating steel prices as uncertainties in steel demand have continued to weigh on the market.

Imports are expected to fall sharply in June after a few Chinese steel mills brought forward maintenance plans to cut output as steel consumption by downstream sectors is expected to fall in the next few months.

According to preliminary figures steel exports were 4.94 million tonnes in May and reached 18 million tonnes for the first five months this year surging by 127%YoY.

Source : Reuters