China iron ore imports rise 6% on 'bullish' mills

Updated: 2010-03-10 15:27
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Iron ore imports by China, the largest buyer, rose 6 percent in February, strengthening the ability of BHP Billiton Ltd, Rio Tinto Group and Vale SA to ask for higher prices.

Imports reached 49.4 million metric tons, compared with 46.6 million tons in January, according to customs data today. Shipments were up 5.6 percent from a year ago.

"It is surprising to see imports are still very strong given that inventories are at record levels," said Helen Lau, an analyst from OSK Asia Holdings in Hong Kong. "This indicates steelmakers are bullish on steel demand, so they increased orders."

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Iron ore prices may soar 60 percent this year as the global economy recovers and steel consumption gains, Morgan Stanley said. Order books are full at Baoshan Iron & Steel Co, China's biggest publicly traded steelmaker, because of demand from automakers, China International Capital Corp said today.

Imports of iron ore by China soared 42 percent to a record 628 million tons last year as steel production reached a high. China, the world's largest steelmaker, may add 50 million tons of steel capacity this year, Angang Steel Co Chairman Zhang Xiaogang said March 5.

Iron ore suppliers may demand at least a 40 percent gain in prices given the Chinese demand, OSK's Lau said. The February import level "would make the iron ore talks even harder for the steelmakers," she said.