According to China’s Customs Administration, iron ore import reached 68.97Mt in January – an all time monthly high.

Several reasons were attributed to this:
Since the Q3 price was comparatively high, steelworks reduced purchases for that quarter in 2010. When steel production began to resume normal levels in Q4 steel companies had to return to the market and import more ore. Second, many steelworks had to increase procurement in Q4 to fulfil their contract volumes, which might be transformed into increased arrival of ore in Q1. A third reason is the lower sea freight rate at the end of 2010, which encouraged both importers and exporters to make more shipments at this time.

Additionally, importers probably build up stock before the Chinese New Year holidays in February.

It seems likely that iron and steel production in 2011 will increase over 2010, which means greater iron ore demand, most of which will come from imports, so iron ore import in 2011 are expected to further rise.

Source: China Metals e-mail