China's iron ore imports fall from record high in 2021

China's iron ore imports fell 4.3% in 2021 from the previous year's all-time high as steel production restrictions imposed to combat pollution dampened demand and pushed prices of the key metallurgical material from all-time highs.

The world's largest consumer of iron ore imported 1.12 billion tons of the commodity last year, up from 1.17 billion tons imported in 2020, data from the General Directorate showed on Friday.

The data showed that China imported 86.07 million tons of raw materials in December, down 18% from November.

China consumed iron ore at a rapid pace in the first five months of 2021, helped by robust steel production as mills made decent profits from a recovery in demand after the first waves of the coronavirus pandemic.

However, imports then began to fall year-on-year as authorities urged steel mills to cut production in order to meet a yearly plan to keep crude steel production flat. The slowdown in construction activity also reduced demand for industrial metal.

In June-December 2021, iron ore imports to China decreased by almost 10% compared to the same period last year. Estimated futures prices for iron ore on the Dalian Commodity Exchange fell 45% by the end of December from a peak of 1,239 yuan per ton in May.

“Iron ore supplies from major mining companies are expected to remain stable in 2022, while demand is largely driven by the government’s policy to control steel production,” said Zhuo Guiqiu, an analyst at Jinrui Capital.

The government-backed consulting firm expects iron ore imports to continue to decline to around 1.08 billion tonnes in 2022 due to falling steel production and increased use of scrap steel.

Steel Trade
Customs data on Friday also showed the country's exports of steel products jumped 24.6% to 66.9 million tons in 2021 from a year earlier, although Beijing urged factories and traders to secure supplies to the domestic market.

China's steel imports fell 29.5% last year to 14.3 million tonnes, according to customs data.