[SINGAPORE] Iron ore imports by China dropped in April compared with the same month a year earlier, adding to signs that demand in the world's largest user may be slowing as the property market cools.
Imports totaled 80.2 million metric tons in April, in line with 80.5 tons in March, and 3.8 per cent lower than a year earlier, according to customs data on Friday. Purchases from overseas in the first four months were 307.3 million tons compared with 305 million tons in the same period in 2014.
The prospect of peak iron ore demand is near after growth in China's steel consumption stalled last year, Goldman Sachs Group Inc said this week, and Australia & New Zealand Banking Group Ltd cut price forecasts today, citing shrinking steel demand. While iron ore rallied last month after BHP Billiton Ltd deferred some port works in Australia and Brazil's Vale SA said that it may cut some higher-cost output, prices remain 69 per cent lower than a record set in 2011 amid a glut.
Iron ore "fundamentals are still bruised by expanded low- cost supply and flat demand," Mark Pervan, head of commodity research at ANZ in Melbourne, wrote in a report on Friday. "Our price downgrades are for 2016 and 2017 on a prolonged period of weakness in China's steel market." Ore with 62 per cent content at Qingdao, which bottomed at US$47.08 on April 2, fell 0.9 per cent to US$60.36 a dry ton on Thursday for the first drop this week, data from Metal Bulletin Ltd. showed. Prices are 15 per cent lower in 2015.
Exports of iron ore to China from Australia's Port Hedland declined last month from March to the lowest level since November, according to figures on Monday. Shipments to China totaled 30.1 million tons in April, compared with 31.2 million tons in March and 28.9 million tons a year earlier, according to data from the Pilbara Ports Authority.
Steel consumption in China will shrink 4 per cent this year and a further 2 per cent in 2016, ANZ said. Iron ore will average US$55 a ton next year, down from an earlier forecast of US$60, and US$60 in 2017, down from US$63, the bank estimated.
Asia's largest economy grew in the first quarter at the slowest pace since 2009 amid the property market slowdown. The world's biggest maker of steel buys iron ore from overseas to supplement local supplies.