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China’s iron ore imports in 2021 decline to record high on steel edging

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BEIJING – China’s iron ore imports fell in 2021, down 4.3% from the previous year’s annual record, as steel production restrictions imposed to tackle pollution have depressed demand and pulled the prices of key steel material off historical highs.

The world’s largest consumer of iron ore imported 1.12 billion tonnes of the raw material last year, up from 1.17 billion tonnes imported in 2020, data from the General Administration showed on Friday.

For December, China imported 86.07 million tonnes of raw material, down 18% from November, the data showed.

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China consumed iron ore at a rapid rate in the first five months of 2021, supported by robust steel production, with factories making decent profits supported by a recovery in demand after the first waves of the pandemic coronavirus.

However, imports then began to contract on an annual basis, with authorities urging steel mills to reduce production to meet the annual target of keeping crude steel production at a stable level. The slowdown in construction activity also reduced downstream demand for industrial metal.

Between June and December 2021, Chinese iron ore imports fell nearly 10% compared to the same period a year earlier. Benchmark iron ore futures prices on the Dalian Commodity Exchange plunged 45% in late December from their high of 1,239 yuan per tonne in May.

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“For 2022, iron ore supplies to major miners are expected to remain stable, while demand is largely determined by the authorities’ policy on controlling steel production,” said Zhuo Guiqiu, analyst at Jinrui Capital. .

A government-backed consultancy expects iron ore imports to continue to decline to around 1.08 billion tonnes in 2022 due to lower steel production and increasing use scrap.

STEEL TRADE

Customs data on Friday also showed that the country’s steel exports jumped 24.6% to 66.9 million tonnes in 2021 from the previous year, although Beijing urged factories and traders to ensure the supply of the internal market.

China’s steel imports last year fell 29.5 percent to 14.3 million tonnes, according to customs.

(Reporting by Min Zhang and Dominique Patton; Editing by Christian Schmollinger & Shri Navaratnam)