(Minews) - China imported 83.39 million tonnes of iron ore in April, the second highest monthly figure on record and up 12.75 percent from March, driven by seasonal demand from Chinese steel mills for the raw material.
The increase came despite weaker iron ore prices, amid concerns that growth in Chinese demand will not be sufficient to meet increases in shipments from major global mining firms.
Iron ore imports in the first four months of 2014 were 305.3 million tonnes, up 21 percent on the year, data from the customs authority also showed on Thursday.
The April rise was driven by high production rates at Chinese steel mills over the month, caused by a pick-up in seasonal demand, although slower-than-expected growth had dragged rebar prices down by 3 percent in April, the fifth consecutive monthly loss.
"People from steel mills and iron ore traders are hoping that second-quarter demand will increase and that steel prices will recover, and then iron ore prices will recover," said Xu Zhongbo, chief executive of Beijing Metal Consulting.
But he said some of the additional import demand was also driven by financing needs, with traders and steel mills still looking for ways to gain access to cash amid a government-driven crackdown on credit.
"Chinese steel mills and traders are still strapped for cash, and still have to use letters of credit to import iron ore rather than using cash to get stockpiles from ports," said Fu Yang, analyst with China's Guotai Junan Futures.
Average daily crude steel output continued rising in mid-April, hitting 2.28 million tonnes from 2.152 million tonnes in the first 10 days of the month, data from the China Iron & Steel Association showed.
Global miners VALE, Rio Tinto and BHP Billiton are all on track to expand their production capacity betting on strong demand from China.
"The rapid rise in iron ore imports is more because of the rising supplies from overseas and global miners, which increased shipments to China," said Fu.
Iron ore stockpiles at main Chinese ports have hit a record high of 112.63 million tonnes by the end of April, aggravating the level of oversupply and curbing buying interest from Chinese steelmakers.
The prospects of growing supplies from global miners and the overhang of inventories pushed down iron ore prices by 10 percent in April, the biggest monthly loss in eleven months.
