Iron ore prices ended last week with a 4% gain, as China’s trade data for June confirmed a surprise dip in imports of the steelmaking material to the lowest level in more than three years.
The Metal Bulletin’s 62% Fe index for iron ore fines ended the week at $US119.29 a tonne, up from $US114.81 a tonne the previous Friday. That was a rise of $US4.48 a tonne in the price over the week.
The previous week saw a 3% dip thanks to the near 9% drop over the last three days of the week. That was despite the price of 62% ore hitting a more than five year high.
The Chinese trade data for June showed iron ore imports fell to 75.18 million tonnes last month, below both the 83.24 million tonnes imported in June 2018 and May’s 83.75 million tonnes.
The data from the General Administration of Customs showed the tonnage was the lowest since February 2016 and came on lower imports from Brazil and Australia, the two major suppliers.
For the first half of the year, the world’s biggest iron ore consumer brought in 499.09 million tonnes of ore, down 5.9% from the same period a year ago.
Supply from Brazil has fallen following the tailings dam wall collapse and associated disaster in January.
As well Rio Tinto, the world’s largest iron ore miner, has cut its forecast for 2019 shipments due to operational problems at its Port Lambert export terminals and the Brockman mining hub in the Pilbara.
Other data showed that stocks of imported iron ore at Chinese ports fell to a 10 week low of 115.6 million at the end of the first week of July.
Reuters reported that Chinese demand for iron ore could ease as top steelmaking cities in China heighten anti-pollution measures, including trimming production at mills, as local officials face mounting pressure to meet air quality targets. Production limits were reported last week in some cities.
The fall in imports in June helps explain the continuing upward pressure on global prices last month.
Shares in the three major Australian miners all fell last week – BHP (down 0.8%), Riot (0.4%) and Fortescue (down 0.2%).
