According to Italian maritime brokerage house Banchero Costa’s China iron and steel update, a recovery is expected in the Chinese steel industry next year in terms of both steel demand and iron ore imports.
The Banchero Costa report said that in China apparent consumption of crude steel dropped 5.1 percent year on year in the first five months of the current year, due to a year-long slump in the construction sector, which accounts for 45 percent of steel demand. However, the housing market is recovering and the inventory overhang has eased and should ease further. New home prices have been rising for four straight months since April, after falling in the previous 10 months.
In the first seven months of the current year, China imported 540 million mt of iron ore, just 0.1 percent higher year on year. At this point, imports for 2015 as a whole are unlikely to exceed 945 million mt, a modest 1.3 percent growth compared to the previous year. Banchero Costa stated that iron ore stocks at ports declined to 79 million mt in June this year, from 116 million mt a year earlier. This is a correction from excessive imports in 2014 which had indicated a significant growth of 13.8 percent year on year.