Iron ore prices were hitting one-year highs on Tuesday as the economic recovery in China, where more than half the world’s steel is forged, surpasses even the most bullish expectations.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $112.48 a tonne on Tuesday, up 22% since the start of the year.
China’s iron ore imports jumped 17% in June from the May total to hit the highest level since October 2017, according to customs data released overnight.
Cargoes of the steelmaking ingredient totalled 101.7m tonnes last month compared to just over 87m tonnes in May, and up 35% from June 2019. For the first six months of 2020 shipments reached 547m tonnes, up 9.6% compared to 2019.
At the current pace, 2020 full year total would handily beat last year’s 1.069 billion tonnes, which was just below 2017’s record 1.075 billion tonnes.
In a note, BMO Capital Markets estimates that China accounted for over 75% of global seaborne iron ore imports during the second quarter of this year.
BMO said when coupled with resilient domestic production of commodities, the robust import numbers “point to extremely strong Chinese apparent demand figures in June”: