China’s import of iron ore saw an accumulated growth rate of 9.5% during the first quarter compared to the same period of 2016.
In 2016, China’s total seaborne iron ore imports achieved a growth rate of 7.7% year-on-year, directly benefiting the dry bulk shipping market. On the other hand, Chinese imports of iron ore by land dropped by 4% year-on-year. In total China imported more than 1bn tonnes of iron ore last year compared to around 928.7m tonnes in 2015.
“The reason for the increase in imported iron ore originates from China substituting domestically mined ore of low iron content for imported ore of much higher iron content and thereby, squeezing more domestically sourced iron ore out of the market,” noted Peter Sand, chief shipping analyst of Bimco.
Sand added that demand for Chinese steel has come from the construction industry and increased public spending on physical infrastructure works.
China’s seaborne import of iron ore also reaped better tonne-mile with Brazil grabbing a larger share of the growth in the Chinese iron ore import market. The South American country exported 12.1% more to China in 2016 compared to 2015.
An 8.5% growth in tonne-mile according to Bimco’s calculation of Chinese iron ore imports further emphasises that China is sourcing their iron ore imports from farther distanced origins in 2016 compared to 2015.