F REIGN TRADE - 中国国际贸易促进委员会

Metal
China iron ore imports hit fresh high
China’s commodities imports accelerated in 2012 in volume terms in spite of
slowing growth in the overall economy, with crude oil, iron ore and copper all
reporting record high imports for last year, Financial Times said.
Data from Chinese Customs released on January 10 revealed that iron ore imports
were up 8.4 per cent, increasing at a slightly slower pace than in 2011 but still
faster than the overall economy. China’s iron ore imports last year totaled $95.6bn,
standing at 743.6m tonnes, according to customs data. Imports in December were
70.94m tonnes, hitting fresh high for one month, 5.16m tonnes more than the previous
month.
The slowdown in the Chinese construction sector, combined with sliding steel
prices during most of the year, caused iron ore prices to gyrate in 2012. However,
prices have been steadily recovering for the past four months and are at their highest
levels in more than a year, further reported by Financial Times.
Higher ore prices came amid hopes of rising demand as China accelerated approval
for major infrastructure projects to bolster economic growth.
“China had a very strong year in terms of commodities imports,” said Sijin
Cheng, commodities analyst at Barclays. However, she added, the underlying drivers
for the imports were “more complex” than in previous years because of factors
such as strategic stockpiling and speculative imports.
China iron ore imports
Million tonnes
75
70
65
60
55
50
45
40
2010 2011 2012
Source: Thomson Reuters Datastream
Comment
The reasons for rising price of iron ore recently are also “complex”. For instance, the coming
spring festival forced most enterprises to replenish stock; Christmas holiday in western
countries reduced the supply of iron ore in Chinese market. Since the price of imported iron
ore is becoming higher and higher, and the strategic stockpiling is going to an end, more and
more enterprises are less willing to import iron ore, which is expected to embrace the price
consolidation.
Major steel companies see profits surge
Statistics from the China Iron and Steel Association
showed that major Chinese steel firms returned to reporting
profits in November of 2012 after bringing a fourmonth
series of losses to an end a month earlier, according
to China Daily.
In the first 11 months of 2012, the 80 major steel
makers posted a loss of 1.97 billion yuan, Wang Qinghai,
chairman of the association, said during a meeting on January
5.
From January to November, members of the China
Iron and Steel Association saw their revenue fall by 5.37
percent year-on-year, while their loans increased by 6.58
percent and their financial costs by 24.38 percent, Wang
said.
“The asset-to-liability ratio of the member companies
had increased by about 1.64 percentage points year-on-year
to 68.67 percent by the end of November,” Wang further
introduced at the meeting.
During the trying year, the operating profit of this
China’s biggest steel maker, Baoshan Iron & Steel Co,
declined as it suffered falling gross margins due to weaker
steel demand and a high price of iron ore. The company
sold its stainless and special steel businesses. It has decided
to raise the ex-factory price for February delivery in 2013 of
its main products.
Despite the difficult times for the
Comment
industry, the majority of small steel
enterprises are still continuing to operate. As a
result, the nation’s steel output has increased
continuously in recent years, even as the growth
in demand for the metal began to slow. Though
the output numbers rise, China is actually using
less steel. Thus, analysts said the steel industry’s
profits will continue to be small for a long time.
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