Australia and Brazil, the world’s two largest iron ore producers, remained China’s top suppliers in 2020, but imports from India soared 88% as Chinese mills diversified sources amid sky-high raw materials prices.
Australian shipments rose 7% to 713 million tonnes, while Brazilian supplies were up 3.5% at 235.7 million tonnes, data from China’s General Administration of Customs showed on Wednesday.
“The two countries’ rise could not fully meet China’s demand,” said Tang Chuanlin, analyst with CITIC Securities, “Mills had to buy from other countries.”
The world’s top steel producer imported 44.8 million tonnes of iron ore from India last year, compared with the 23.8 million tonnes purchased in 2019, and was the most in nine years.
China churned out a record 1.05 billion tonnes of crude steel in 2020, with demand boosted by Beijing stimulus for infrastructure.
India, the world’s third-biggest steelmaker, suffered a 12.6% decline in the nine months though December from same period year earlier, government data showed, leaving more iron ore to sell to Chinese buyers.
Tang also noted that Chinese steel firms were using more low-grade ore, like India’s, as part of an effort to lower costs.
Almost two-thirds of India’s iron ore exports to China had less than 58% iron content, according to Indian mining industry estimates.
“The purchases will continue until March (on strong Chinese demand),” said B.K. Bhatia, joint secretary general of the Federation of Indian Mineral Industries, the country’s biggest mining lobby group.
Bhatia expected Chinese buying to continue through until March, but said it was too difficult to predict demand beyond then.
Spot prices of iron ore with 62% iron content for delivery to China jumped 73% in 2020, while 58% iron ore soared 91%, according to SteelHome consultancy.
(By Min Zhang and Neha Arora; Editing by Christian Schmollinger and Simon Cameron-Moore)