Market trends

China ups its iron ore imports

by Port News Editorial Staff

In the first two months of 2021, China’s iron ore imports increased by 2.8% to 181.5 million tonnes, i.e. 4.7 million tonnes more than in the same period last year.

BIMCO reported this, adding that China was one step away from reaching their January-February 2018 record, when they imported 184.6 million tonnes.

Despite the Pandemic, iron ore imports rose to 1.17 billion tonnes in 2020. This is the strongest annual result ever recorded by the country, and it’s directly proportional to their increased steel production (+5.2% in 2020).

According to Bimco’s chief shipping analyst, Peter Sand, the trend has changed compared to previous years, when the use of electric arc furnaces and scrap steel instead of coal had reduced the demand for iron ore. He said that the government’s stimulus measures, focused on fully recovering industrial production and exports, were the main reason for the new surge in iron ore imports.

Mr. Sand believes, however, that, in the long term, the shipping industry will have to do without Chinese iron ore imports. The steel production industry is one of the most polluting in the world and its development now runs counter to Beijing’s goal of achieving carbon neutrality by 2060.

The adoption of electric arc furnaces has increased considerably over the last few years, encouraging the use of scrap, but it must be said that China remains the world’s largest steel producer, with a share of over 53.3% of world production, almost entirely produced by blast furnaces.

The investment in African mines also suggests that Beijing is not yet ready to abandon the use of iron ore yet, to the detriment of environmental sustainability.

Will China achieve its goal of climate neutrality by 2060, as President Xi Jinping promised in September 2020?

Translation by Giles Foster

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