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| Australian Iron Ore Exports |
Chinese buying drives growth amid falling shipments to Northeast Asia
Australian iron ore exports rose 5% year-on-year in July, reaching 75 million tonnes, driven by surging Chinese demand. However, weaker imports from South Korea and Vietnam underscore regional divergence in steel production dynamics.
China Offsets Falling Imports from South Korea and Vietnam
Chinese steelmakers imported 63 million tonnes of Australian iron ore in July, a 7.4% increase from the previous year. This growth offset significant declines in South Korean and Vietnamese demand. South Korea’s imports fell 22% to 4.3 million tonnes, as domestic steel production dropped to 5.3 million tonnes. Meanwhile, Vietnam’s imports plummeted 37% to just 663,158 tonnes, reflecting sluggish construction activity.
In contrast, Australia’s exports to Japan remained stable, edging up 0.2% to 4.4 million tonnes. However, Japan’s Ministry of Economy, Trade and Industry (METI) forecasts a 2.3% year-on-year drop in crude steel output for Q3, extending its downturn into a second quarter.
August Trends Point to Continued Supply Growth
Preliminary shipping data indicates a 0.2% year-on-year increase in August exports from Western Australia’s four major ports. Shipments to China grew, while volumes to South Korea and Japan declined further. These shifts suggest Australia’s supply remains resilient, even as Northeast Asia’s steel demand softens.
Iron ore prices have responded accordingly. Argus assessed the 62% Fe fines (ICX) cfr Qingdao at $103.35/t on September 3, up from $93.05/t on July 1. Price momentum reflects not only strong Chinese offtake but also continued market sensitivity to steel production trends across Asia.
Export Outlook Depends on Chinese Steel Policy
While Chinese crude steel output rose in early August, market participants expect moderation from late August into September. Any production curbs from Beijing could affect import volumes. Nonetheless, Australia’s dominant role in seaborne iron ore, especially for Chinese buyers, reinforces its near-term export outlook.
Therefore, despite mixed demand signals, Australia remains a stable supplier amid volatile steel cycles in Asia. Port-level data and pricing trends suggest continued resilience in the face of regional headwinds.
ScrapInsight Commentary
Australian iron ore exports remain robust thanks to strong Chinese demand, despite clear signs of softening in Northeast Asia. Pricing strength above $100/t reflects constrained supply elsewhere and China’s sustained restocking. However, any steel output cuts in China could quickly reverse these gains. Scrap markets should monitor iron ore flows closely for substitution opportunities in blast furnace-based operations.
