China has seen a decrease in the price of its iron ore imports over the first five months of the year, reports the Xinhua-run China Securities Journal.
New data from the General Administration of Customs shows that China imported 24.57 million tons of iron ore fines and concentrate in May with an average CIF (Cost, Insurance and Freightage) of US$60.49 per ton.
The monthly CIF of imported iron ore from January to April was US$63.96, US$62.68, US$61.16 and US$60.83 per ton respectively, representing a dropping trend.
The price in May was 4.89 percent down from January and 5.35 percent lower than that of US$64.27 last December, said the report.
China imported 26.58 million tons of iron ore fines and concentrate in January and 24.89 million tons in February. The amount rose to 29.43 million tons in March, and then dropped to 27.29 million tons in April and 24.57 million tons in May.
The total amount of imported iron ore in the first five months was 21.3 percent up from the same period of last year, but 2.2 percent and 10.6 percent down from the amount in the first four and the first two months respectively, said the journal.
The total sum China spent on imported iron ore in the first five months was 11.6 percent up over last year. But it is 4.6 percent and 19 percent down from that in the first four and the first two months respectively.
The drop of both the amount and price of imported iron ore results from the decrease of domestic demand growth, which depends on China's efforts to straighten the imported iron ore market and to improve the domestic steel industrial structure, said experts.
Higher domestic storage of imported iron ore is another factor, said the report.
According to statistics of the China Iron and Steel Association, China's storage of imported iron ore was as high as 33 million tons by last February and 49 major importers boast a storage of 26.51 million tons.
Expecting a rise in the price of imported iron ore, some importers increased their imports at the beginning of this year, said the report.
However, the total imports are still big compared with the average monthly imports of 23 million tons last year.
The report estimates that with the expected balance of China's steel market, the demand for iron ore will not increase markedly and the price will stabilize.
(Xinhua News Agency June 15, 2006)