Chinese iron ore imports surged 48 percent to a record in January, compared with a year ago, as traders replenished stocks in expectation of rising ore prices.
Imports climbed to 68.97 million tons in January, up 18.8 percent from 58.08 million tons in December, according to the General Administration of Customs on Monday.
The previous record for iron ore imports was 64.55 million tons in September 2009.
"Chinese steel mills and traders bolstered iron ore inventories because they expect ore prices will further go up due to rising steel prices, leading to a jump in iron ore imports," said Zhang Lin, a senior analyst with Beijing Lange Steel Information Center.
The average price of imported ore stood at $151 per ton in January, close to the record of $154.4 per ton set in August 2008, Zhang said.
Extreme weather in Australia and Brazil, coupled with rising inflation also drove up coal and iron ore prices. Coking coal and iron ore supplies from top exporter Australia have been disrupted by massive floods.
Steelmakers have ramped up production and raised metal prices for downstream industries.
Steel production rose 2.6 percent to 51.5 million tons in December from a month earlier, according to the National Bureau of Statistics.
Higher steel production and higher prices, coupled with lower freight costs and a stronger yuan, boosted iron ore demand, Bloomberg quoted Helen Lau, a Hong Kong-based analyst at UOB Kay Hian Ltd, as saying.
The cost of shipping iron ore from Australia to China has dropped 25 percent in the past year to $6.77 per ton, according to the Baltic Dry Index, the report said.
Steel prices increased to 4,868 yuan ($738) a ton on Jan 26, the highest since Sept 25, 2008, on rising demand from the construction and auto industries.
Domestic average steel indexes reached 194.5 on Feb 11, up 1.6 percent from the previous week, and up 27.3 percent from a year ago, according to data from Lange Steel Information Center.
China Daily
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