Iron ore imports by China surged to a record of more than 100 million tonnes, smashing the previous high set in 2015, as the country’s concerted push to clean up the environment stoked demand for higher-grade material from overseas while hurting local mine supply.
Purchases of iron ore last month expanded to 102.8 million tonnes, compared with 93 million tonnes a year earlier, surpassing the previous record of 96.3 million tonnes in December 2015, Chinese General Administration of Customs data released on Friday showed.
Over the first nine months of this year, imports climbed 7.1 percent to 817 million tonnes, putting full-year purchases on course to top 1 billion tonnes by a comfortable margin.
China has been pulling in ever-greater volumes from miners in Australia and Brazil, including Vale SA and BHP Billiton Ltd, to meet resilient demand from steelmakers, who have benefited from rising profit margins.
As Asia’s top economy presses home a drive to clean up the air, mills are seeking out higher-grade material.
At the same time, local mines have been restricted, with Macquarie Group Ltd saying Chinese iron ore output has collapsed.
“High-grade ore is certainly gaining popularity,” Maike Futures Co (邁科期貨) analyst Dang Man (黨曼) said via text message. “Seasonally, September is a strong month for imports, as mills tend to stock up before winter. We think purchases will drop significantly in October as steelmakers cut output.”
Last month, steel exports tumbled to 5.14 million tonnes, the lowest since 2014, while aluminum cargoes dropped to 370,000 tonnes, a seven-month low.
On Friday, futures in Singapore advanced by as much as 6.2 percent to US$62.20 per tonne.
The benchmark spot price for 62 percent content ore in Qingdao climbed 4.1 percent, the most since August, to US$62.53 per dry ton, Metal Bulletin Ltd data showed.
Meanwhile, oil climbed to the highest level in two weeks as dwindling US crude stockpiles and near-record Chinese imports signaled the worldwide glut is eroding.
Futures on Friday advanced 1.7 percent in New York, posting the the biggest weekly gain in a month.
In China, the world’s second-biggest oil market, crude imports last month jumped to the second-highest on record.
US oil inventories slid for a third straight week and the chief of the International Energy Agency predicted that worldwide supply would soon be in sync with demand, provided OPEC maintains ongoing output cuts.
Oil has risen five of the past six weeks on signs that self-imposed supply limits implemented by OPEC and allied producers such as Russia are gradually draining a surfeit that has weighed on prices for more than three years.
OPEC reportedly estimated that its efforts to clear the oversupply would be successful by the end of September next year.
West Texas Intermediate for delivery next month added US$0.85 to settle at US$51.45 per barrel on the New York Mercantile Exchange. Total volume traded was about 6 percent below the 100-day average. Prices were up 4.4 percent for the week.
Brent for December settlement climbed US$0.92 to end the session at US$57.17 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of US$5.44 to December West Texas Intermediate.
Wholesale gasoline rose US$0.04 to US$1.62 per gallon, while heating oil added US$0.03 to US$1.80 per gallon and natural gas edged up US$0.01 to US$3 per 1,000 cubic feet.
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