China’s iron ore imports in May fell 9% from April but were up on May a year ago even though prices rose 20% in the month to end above $US100 a tonne (for 62% Fe fines) for the in time in 10 months.
China’s General Administration of Customs data for May revealed that iron ore imported totalled a still high 87.03 million tonnes of iron ore last month That compared with the near-record 95.71 million tonnes imported in April and was up 3.9% from May 2019.
For the first five months of the year, arrivals of the steelmaking raw material were 445.31 million tonnes up 5.1% on the same period in 2019. Imports for the first four months of 2020 were up 5.3% from a year earlier.
Iron ore inventories at China’s ports fell to 109.5 million tonnes as of May 29, the lowest since November 2016.
Data released on Sunday showed that China’s steel product exports in the January-May period fell 14% year-on-year to 25 million tonnes.
Global iron ore prices eased last week to close on Friday at $US100.74. That was down 65 cents a tonne from the week before.
Helping drive prices higher have been shortfalls in exports from Brazil as COVID-19 infects some of the mines and towns in the northern and southern mining systems of Vale, the country’s largest miner and exporter.
Brazil’s iron ore exports in May fell by over a quarter compared with the same period a year earlier.
It exported 21.50 million tonnes of ore last month, which is 28.2% lower than the 29.87 million tonnes it shipped out in May last year, according to figures released by the country’s economy ministry last week. the 2019 figure was lower than the year before because of the mine suspensions and interruptions triggered by te January 25 (2019) mine dal wall collapse in the southern mining system.
Brazilian April iron ore exports, in turn, were more than 7% down on March. Iron ore exports came to 25.54 million tonnes in April from 27.53 million tonnes in March.
Vale maintains that it expects its iron ore shipments to China, which totalled 190 million tonnes in 2019, to increase this year due to falling demand in other countries.
China’s coal imports in May fell nearly 20% compared with a year earlier despite rising demand from power plants and industrial users as the economic activity recovered from the lockdowns in late January through April.
Reuters reported the fall was a bit of a surprise as analysts and industrial participants “had expected China to tighten coal import rules in the second half of 2020 to support domestic miners, and imports starting in July may drop by as much as a quarter from the corresponding 2019 period.”
According to the Customs department figures China imported 22.06 million tonnes of coal in May, down a third from 30.95 million tonnes in April and 27.47 million tonnes in May 2019.
Still, imports in the first five months of the year were up 16.8% from the same period of 2019 at 148.71 million tonnes. At that pace, imports will still go close to topping 300 million tonnes which seems to be the upper limit for imports. That points to further restrictions in the coming months.
China’s crude oil imports jumped 19.2% in May to a record monthly figure of 47.97 million tonnes, or 11.3 million barrels a day, according to The Customs trade data on Sunday.
Traders said the surge was a sign that China has taken advantage of the low prices in April and May and added to its strategic reserves of oil. There should be another rise in imports for June if that is the case.
Natural gas imports were up 3.7% from a year ago at 7.84 million tonnes.
Meanwhile, Saudi Arabia has boosted crude oil prices, wiping out the recent discounts in its price war with Russia in March and April.
The price rises came as OPEC and Russia extended the 9.7 million barrel a day production cuts to the end of July.
The steepest increase will hit July exports to Asia, state producer Saudi Aramco’s largest regional market, according to media reports.
The month-on-month increase in the official selling price for flagship Arab Light crude to Asia, is the largest in at least 20 years, according to Bloomberg. Aramco raised Arab Light to Asia by $US6.10 a barrel to a premium of 20 US cents over the benchmark.
It raised July pricing for all grades to Asia by between $US5.60 and $US7.30 a barrel.
Buyers in the US, the Mediterranean region and northwestern Europe will also pay more for oil.
Meanwhile, there are more and more reports of US shale producers re-opening wells shut-in when prices collapsed. If this trend gathers pace then the production falls seen in the past two months will slow and start to be reversed.
So far there’s no sign yet of a rise in active US oil rig numbers, so the re-openings haven’t spread to new drilling campaigns by companies.
Copper was mixed in May as Chinese buyers didn’t really take advantage of weakish prices as they did with the surge in oil imports to record levels.
Copper concentrate imports were 1.69 million tonnes in May, down from 2.03 million tonnes in April (the third-highest on record) and 1.84 million tons a year ago.
But imports of unwrought copper and products totalled 436,031 tonnes, down around 9% from 461,458 tonnes in April but up nearly 20% from May 2019’ 361,000 tonnes.
Copper prices went nowhere for the first half of May but firmed towards the end of the month.
Meanwhile, figures issued on Monday showed Australian iron ore exports in May to China rose through the main shipping point, Port Hedland.
The Pilbara Ports Authority said shipments to China rose by around 4% to 47.8 million tonnes from May 2019 and were also more than 5% up on April’s 45.2 million tonnes.
Even though iron ore exports as a whole into China fell last month from April, Port Hedland shipments were up 2.6 million tonnes at a time when prices topped $US100 a tonne late in the month.
