Iron ore price surges on Chinese import growth
After weeks of relentless selling the spot price of iron ore bounced back on Monday after trade data from China showed imports of the steelmaking material continued to grow.
The 62% Fe import price including freight and insurance at the Chinese port of Tianjin added $1.50 or 3.2% to $48.80 a tonne on Monday, a two week high. Iron ore remains down more than 30% this year, after a 47% decline over the course of 2014.
At the beginning of April the spot iron ore fell to the lowest level since November 2008 when The SteelIndex first started tracking the spot price. In 2008, the benchmark contract price was $60.80 a tonne, which was hiked from the annually-set price in 2007 of $36.63.
Trade data releases over the weekend showed China, which consumes more than 70% of the world's seaborne iron ore trade, imported 80.5 million tonnes in March, an 18.5% jump from the previous month.
While seasonal factors played a huge part in the recovery from February, first quarter shipments managed to eke out a 2% gain from 2014's record setting pace.
At the same time exports from the Western Australian hub of Port Hedland, the world's largest terminal for the commodity, came in at 36.6 million tonnes in March a 6% year on year increase, but a slowdown from the torrid pace of expansion above 30% recorded over the past year.
Port stocks in China are also down from its peak above 110 million mid-year 2014, but remain elevated at 95 million tonnes.
Soft demand may curb any upside for the price however. Steel consumption in China fell last year for the first time since 1995 after years of overcapacity and low profitability and a pollution clampdown by Beijing could see as much as 40% of the country's small and medium-sized operations being shut down.