After five months of almost stagnant numbers, the ore imports of China for August have gone up more than 10%. But even with this robust rise, the country's ore demands remain low because of the government's tight regulations on steel outputs.
These regulations are meant to reduce the country's excessive carbon emission, in which steel production is one of the main contributors. But as a consequence, the government's imposed limitations have also decreased iron consumption in the country.
According to data released by China's General Administration of Customers, the country bought 97.49 million tons of steelmaking materials last month.
Compared with 88.51 million tons imported from the previous month, volumes were down almost 3% from 100.36 million tons in August last year.
China, which is currently the biggest ore consumer in the world, has imported 746 million tons of iron ore in the first eight months of the year. This was down 1.7% from the same period a year ago.
"It's unsurprising to see a rebound in China's iron ore imports, given the impressive recovery in Brazilian run rates (at mines) over the past eight weeks," Attila Widnell, managing director at Navigates Commodities, said in quotes by Reuters.
Widnell also said that bigger iron ore arrivals have resulted in the expansion of port inventories above 131 million tons as a result of the government's tighter policies on steel production.
The benchmark iron ore futures on the Dalian Commodity Exchange was up 1.1% by the close of morning trade. As a result, it has recovered slightly from early losses that brought it to a seven-month low on rising portside stocks and weak demand.
In a data released by the country's customs department, it shows that China's steel exports fell almost 11% from a month earlier to 5.05 million tons in August.
In an attempt to ensure domestic steel supply, the Chinese government has raised export tariffs for iron and ferrochrome and canceled export tax rebates for several steel products.
The customs also added that the country's steel imports remained at 1.06 million tons last month, slightly up from 1.05 million tons in July.
