China's iron ore imports slip in November

China's iron ore imports fell by 2.4pc on the month to 90.65mn t in November, although volumes were around 8pc higher from a year earlier.

January-November iron ore imports were down by 0.7pc from the year-earlier period to 970.69mn t but they are on course to exceed 1bn t for a third successive year, according to customs data.

Portside stocks of imported iron ore at major Chinese ports were down by 3.53pc on 30 November to 123.83mn t, according to the China iron and steel association Cisa.

Tight portside stocks of mainstream medium-grade fines have lifted prices since mid-November, with the Argus ICX 62pc index assessed at $89/dry metric tonne (dmt) on 6 December, close to the $90/dmt resistance level that has not been breached in the physical market since 15 October.

Steel demand in China was robust in November, nearly doubling mill profits from late-October levels. High profits have provided mills with incentives to use more medium- and high-grade ores to keep producing at near-peak levels.

Steel demand seasonally falls in December, although it is unlikely to be a sharp drop. This may affect demand for iron ore later this month. But several mills may soon start booking cargoes to stock up for the lunar new year holiday in January, supporting prices.

Winter steelmaking and sintering restrictions — which usually lead to a reduction in demand for iron ore fines — may be less severe in 2019-20 compared with previous years as most cities seem to be imposing short-term steelmaking and sintering restrictions during periods of heavy pollution rather than blanket cuts from November-March.