Imports of iron ore from China will set a new high in 2020

China’s iron ore imports reached a new high of 1.17 billion metric tonnes in 2020, with an average import price of $101.7 per tonne, up 7.3 percent year on year, according to analysts, reflecting strong demand in the downstream steel industry and the Chinese economy’s continued and steady recovery.
According to the General Administration of Customs, the volume surpassed the previous record of 1.08 billion tonnes set in 2017.
Last year, the corresponding value of imported iron ore reached a new high of 822.87 billion yuan ($127 billion), up 17.4 percent year on year.
In the first 11 months of this year, China exported 48.83 million tonnes of steel, down 18.1 percent year on year, while imports increased 74.3 percent every year to 18.86 million tonnes. According to the Ministry of Industry and Information Technology, the country’s iron ore imports grew 10.9 percent every year to 1.07 billion tonnes in January-November, surpassing the total volume imported in 2019.
According to Zhu Yi, China’s demand for iron ore could remain strong this year, a senior analyst for metals and mining at Bloomberg Intelligence, due to higher crude steel production, boosted by increasing demand from downstream sectors such as infrastructure construction and vehicle manufacturing.
“The supply of iron ore from overseas miners will pick up in 2021, as production and shipments were disrupted by COVID-19 and the global iron ore market was in short supply previously,” Zhu said.
Iron ore is necessary for the manufacture of steel, which is needed for a large industrial base’s continued existence. 80% of China’s iron ore demand is imported, mainly from Australia and Brazil.
Imports of iron ore from these two countries account for 60% and 20% of the country’s total product imports, respectively.
“The price of iron ore may stay high in the first quarter this year due to potential production losses from weather issues, and then start to decline later in the year,” she added.
This is despite China’s economy growing by 2.3 percent in 2020, with critical economic goals exceeding expectations and industrial production rising by 2.8 percent year-on-year in 2020 and 7.3 percent in December.
According to the National Bureau of Statistics, China’s economy is projected to be the world’s only major economy to expand in 2020, with GDP reaching 101.59 trillion yuan ($15.68 trillion), surpassing the 100 trillion yuan mark.
According to the Ministry of Industry and Information Technology, China’s steel firms posted a third consecutive monthly rise in exports in November, owing to competitive advantages in the foreign market and a pickup in overseas demand.
According to Li Xinchuang, chief engineer of the China Metallurgical Industry Planning and Research Institute, China’s steel product consumption is projected to rise 9.6% year on year to 981 million tonnes in 2020 and 1% to 991 million tonnes in 2021, demonstrating the Chinese economy’s high resilience amid the COVID-19 effect and the global economic downturn.
Due to the massive potential for future growth, Qu Xiuli, vice chairwoman of the China Iron and Steel Association, believes that the country’s steel sector should further tap the possibility of new and high-end products to pursue high-quality production.
She also recommends that the industry focuses on innovation and low-carbon growth.