Chinese imports of iron ore were recorded with a significant decline in June, down 11.6 percent from the previous month, according to official data recently released.
It was believed that the fall comes as China is stepping up efforts to improve the country’s worsening ecological environment and stockpiles at ports continued to rise.
Iron ore shipment to the world’s biggest importer and consumer of the essential steel-making material came in at 83.24 million tonnes last month, data from the General Administration of Customs showed, as compared to the 94.14 million level in May and 94.7 million in June last year.
During the first half of this year, China imported 1.6 percent less iron ore than the same period of 2017, with a total amount of 530.69 million tonnes, the data showed, largely due to extensive restrictions on the national steel production in the first three months.
As for inventories, there were 156.38 million tonnes of iron ore stockpiled at Chinese major port last week, almost flat with a record level of 161.98 million tonnes in early June, according to SteelHome, a Chinese professional consultancy for global steel market. The latest inventory level is nearly 40 percent higher than the five-year average of 113.45 million tonnes.
Additionally, a wide range of environmental inspections in ten regions across the country lasting for nearly a month, which slows down operations of steel makers, also curbed the demand for iron ore in June.
As a result, crude steel output at major steel producers dropped from 61 million tonnes in May to 59.3 million tonnes last month, according to data from China’s Iron & Steel Association (CISA).
“Iron ore demand may be further suppressed by environmental measures in the coming months,” said an industry analyst.
Tangshan, a Chinese city well known for its steel-making capacity, ordered steel mills, coke producers and utilities to slash output for a six-week long period starting June 20 for seeing a blue sky, which is expected by analysts to affect up to 150,000 tonnes of hot steel output.
Steel enterprises in the Beijing-Tianjin-Hebei region are likely to be treated to more stringent regulatory measures for environmental control as Chinese central authorities have set up a new cross-ministerial leadership group aimed at working out plans to fight against air pollution in the area.
“Utilization rates at mills have reached a relatively high level and it is hard for those who are exempted from the environmental crackdown to improve output,” said analysts.
According to data from Mysteel consultancy, China’s blast furnaces have operated at weekly utilization rates of 70.86 percent in the latest week, not far lower than the 8-month high of 71.96 percent in late May, as seasonal overhaul at mills commenced.