By Clyde Russell
LAUNCESTON, Australia- The world’s imports of seaborne iron ore rose a modest 3.6 percent to a record high in 2024, but the increase was almost entirely driven by China, the world’s biggest buyer of the key steel raw material.
Global seaborne imports of iron ore were 1.707 billion metric tons in 2024, up 60 million tons from the 1.647 billion in 2023, according to data compiled by commodity analysts Kpler.
But of that 60 million ton increase, 59.1 million tons were accounted for by China, as its seaborne imports rose 4.9 percent to 1.274 billion tons.
This means China’s seaborne imports of iron ore will be at a record high in 2024, a fact that looks somewhat incongruous with the likely decline in steel production.
Official data showed that crude steel output in the first 11 months of 2024 was 929.19 million tons, down 2.7 percent from the same period in 2023.
Given that December is likely to have been a soft month for steel production given winter shutdowns and lower seasonal demand, it’s likely that full-year output will drop in 2024 from 2023.
Nonetheless, China’s steel production will come in around the 1 billion ton level for 2024, marking the sixth straight year it has been around this volume.
With China’s steel output effectively flatlining since 2019, the question for the market is why iron ore imports gained in 2024.
There is likely some element of replacing lower-quality domestic production, but the main drivers are probably the lower price trend over the year and the rebuilding of inventories.
The price of iron ore contracts traded on the Singapore Exchange had their 2024 peak very early in the year, hitting $143.60 a ton on Jan. 3.
They then declined to a low of $91.10 a ton by Sept. 10, before recovering to end the year at $103.61.
But the 28 percent drop over the year was likely enough to prompt Chinese steel mills and traders to increase purchases, especially in the second half of the year when prices were lower than in the first half.
The price has had a soft start to 2025, dropping to $97.36 a ton on Wednesday.
This decline is more sentiment driven, given worries about the trade policies of the incoming US administration under President-elect Donald Trump, with the threat of tariffs of up to 60 percent hanging over steel-intensive industries such as manufacturing.
China has also been rebuilding inventories, with port stockpiles monitored by consultants SteelHome ending last year at 146.85 million tons, up from 114.5 million at the end of 2023.
That gain of 32.4 million tons is slightly more than half of the total increase in seaborne imports, underscoring the significance of inventory building to China’s iron ore demand in 2024.
The outlook for China’s iron ore and steel sectors is clouded by uncertainty over what actual policies the new Trump administration will implement, and how China and other affected countries will respond.
Like other commodity markets, iron ore is largely in a wait-and-see mode ahead of Trump’s return to office on Jan. 20.
The same uncertainties will also weigh on iron ore demand outside China, but there are some established trends that are likely to continue. —Reuters
