Traders to blame

Speculators are to blame for pushing China’s iron imports to record highs, the head of the China Iron and Steel Association (CISA) has said.

China is blaming speculators for the dramatic rise in iron ore imports

China’s iron ore imports in April reached 57mt, a year-on-year increase of 33%. Imports between January and April have risen 23% to 188mt.

Customs data shows that six of the top ten iron ore importers in the first quarter were traders, compared with an average of two or three.

The CISA has said it will launch an investigation into the iron ore importers and the findings were expected to come out shortly.

“Excessive imports would stretch steel makers’ capital, and increase their operating risk,” Shan was quoted as saying by Xinhua.

Last week China’s Ministry of Industry and Information Technology issued an emergency circular ordering commercial banks to halt or reduce loans to steel mills seeking to boost capacity without considering market demand.

The circular also required authorities to seek measures to control the number of steel traders and to crackdown on the stockpiling and selling of iron ore at high prices.

China’s surge in iron ore imports sent the Baltic Dry Index (BDI) to a seven-month high Tuesday.

The BDI added 39 points, or 1.5%, to 2,644 points – it’s highest since 8 October 2008, according to the Baltic Exchange.

According to analysts at Dahlman Rose charter rates for capesize bulkers rose by 2.1% to $36,113 a day. Panamax rates added 0.6% to $20,239 a day.

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