China's Commodities Appetite Continues In March
Besides China’s record oil imports in March, iron ore also stood out with the second highest figure on record announced last week - as global prices fell to their lowest level for more than five months.
China imported 95.56 million tonnes of the steel-making ingredient in March, up 14.5% from the prior month and 12.2% from the same month in 2016, and just below the record 96.27 million from December 2015.
This took first-quarter imports to 270.88 million tonnes, up 12.2% on the same period last year and an all time quarterly high.
After holding up for most of the quarter, spot iron ore prices have tumbled in the past two months.
Spot iron ore prices have declined from a peak this year of $US94.85 a tonne on February 21 to around $67 yesterday, with that 28.3% drop certain to hit domestic Chinese miners (which mine lower grade ore at higher costs) harder than the low-cost exporters in Australia and Brazil.
Plunging iron ore prices and a renewed focus on geopolitical tensions sent the ASX lower last Thursday.
The ASX200 fell 0.7% to 5889.9 in broad-based losses, while the broader All Ordinaries index was 0.7% lower to 5925.9. That produced a half a per cent rise over the shortened week.
Weighing most on the index were the miners, after investors finally woke up to the falling price of iron ore.
BHP and Rio Tinto were 4.0% and 4.4% respectively. Fortescue was savaged after reporting a surprise fall in iron ore shipments in the quarter or around 6%. The company’s shares slumped nearly 7%.
Coal continued its surprisingly strong run, with imports of 22.09 million tonnes in March, up 24.9% from February and 12.2% from a year earlier. For the first quarter, imports jumped 33.8% higher at 64.71 million tonnes.
Lower exports from Australia in the wake of Cyclone Debbie, which shut down much of the coal rail infrastructure in Queensland, may also cause a downward blip in imports in April and May.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.