SINGAPORE – Iron-ore imports by China this year are on course to exceed one-billion metric tons by a comfortable margin, breaking 2016’s record, after figures for the first half showed another jump in cargoes and highlighted the ability of the largest steelmaker to absorb rising seaborne supplies.

Shipments in June were 94.7-million tons, up from 91.5-million in May, according to customs data on Thursday. In the first six months, imports rose to 539-million tons, 9.3% higher than the same period in 2016. Last year, China only just beat the one-billion ton mark, importing 1.024-billion tons.

Asia’s top economy has been pulling in ever-greater volumes of low-cost ore to meet resilient demand from mills, who’ve benefited from rising steel prices in the second quarter. The increase is aiding the largest miners including BHP Billiton and Rio Tinto Group, as well as Brazil’s Vale SA, which is bringing on production from its giant S11D project. While iron prices are lower this year, they’ve rebounded since mid-June, gaining for four of the past five weeks.

'ON THE RISE'
“Steel output continues to be on the rise, which will boost consumption of iron ore,” said Zhao Chaoyue, an analyst at China Merchants Futures Co., who forecasts that full-year imports of the raw material will reach 1.08-billion tons. “Mills are making chunky profits, so they’re firing up production.”

Spot ore with 62% content delivered to Qingdao retreated 2.1% to $64.05 a dry ton on Wednesday after hitting a two-month high a day earlier, according to Metal Bulletin. Still, prices have lost 19% this year as analysts flagged prospects for rising global production.

China’s iron imports supplement local production, although domestic output is generally of lower quality than supplies from Australia and Brazil. Nationwide exports from Australia may rise to 885-million tons in 2018 and 897-million in 2019, from 851-million this year, according to a government forecast.