Beijing: Iron ore imports by China, the largest buyer, are likely to recover next quarter and break last year's record as lower prices and depleted stockpiles spur purchases by steel mills, Nippon Yusen K.K. said.
Imports may reach about 55 million metric tonnes a month in the quarter, as an expected contract price decline of more than 10 per cent spurs demand, Kazuo Ogasawara, general manager of the capesize bulker group at Japan's largest shipping line said.
Shipments were 47 million tonnes in June and 51 million tonnes in July, he said. "Chinese demand for iron ore won't be weak," Ogasawara said in Tokyo. The nation, which accounts for half of the world's steel production, is set to break last year's record for iron ore imports of 628 million tonnes, he said.
Benchmark Chinese steel prices gained 9.5 per cent in the five weeks to August 20, signalling the market may be improving after government measures to curb property speculation depressed demand.
Nippon Yusen plans to more than double the number of iron ore and coal carriers for the Chinese market within five years, as it bets raw materials consumption will increase.
Nippon Yusen, based in Tokyo, was unchanged at 331 yen as of 3pm on the Tokyo Stock Exchange, after earlier falling as much as 1.8 per cent. The Japanese shipping company signed a 10-year contract with Anshan Iron & Steel Group to transport iron ore last quarter, adding to its Chinese customers including Baosteel Group Corp. and Wuhan Iron & Steel Group., Ogasawara said. The company has 20 ships carrying coal and iron ore into China now, he said.
"The Chinese government will likely accelerate public spending to develop central and western China under the country's next five-year plan to narrow an income gap between people living in the coastal areas and the interior regions," Naoki Iizuka, a senior economist at Muzuho Securities Co., said in Tokyo.
"Demand for construction materials will increase significantly."
