China on track to import 1 billion tonnes of iron ore this year

On Wednesday the Northern China benchmark iron ore price held onto recent gains to trade at $52.10 per dry metric tonne according to data supplied by The Steel Index after Chinese imports of the steelmaking raw material continued to gather pace.

The price of iron ore is down sharply since trading within shouting distance of the $70 mark in mid-April but is back in bull territory for 2016 with a 22% rise since the beginning of the year and a 40% rebound since hitting near-decade lows in December.

Customs data released today showed China imported 86.75 million tonnes of iron ore in May, the fourth highest monthly figure on record and the biggest volume this year. May cargoes constituted a 22.4% rise from a year earlier.

Australia and Brazil are predicted to increase their share of the seaborne market to 90% within five years from 77% at the moment

Shipments climbed 9.1% to 412.15 million tonnes in the first five months of the year and at the current rate could reach the 1 billion tonnes per year mark in 2016 for the first time. Year to date iron ore is averaging $51.60 a tonne.

The country's iron ore imports has coincided with stockpiling, however. Inventories at the country's ports now stand at just over 100 million tonnes, up from 75 million tonnes during the summer months last year.

A recent report by Australia's Dept of Industry showed the country and to a lesser degree Brazil, are wiping the floor with producers in other countries. The two nations are predicted to increase their share of the seaborne market to 90% within five years from 77% at the moment. South Africa, Ukraine and Iran make up the top fiver iron ore suppliers to China.

Australian government analysts estimates global trade in iron ore to inch up by only 4 million tonnes from 2015 levels to reach 1.48 billion tonnes in 2016, the lowest rate of growth in more than a decade. By 2021 world trade in iron ore is forecast to jump to just under 1.6 billion tonnes.

Iron ore dependence on China won't diminish even as imports begin to fall from record levels next year according to the report. China last year consumed two-thirds of the seaborne iron ore supply with imports reaching a record 968 million tonnes according to dept calculations.

China on track to import 1 billion tonnes of iron ore this year