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Iron ore reverts to supply-driven market
Source:Sydney Morning Herald   Time:2017-06-23 10:34:26

Iron ore's demand-driven price surge last year is increasingly looking like an aberration as supply factors once again start to weaken the price outlook.

When spot Asian iron ore prices jumped 81 per cent in 2016, the surprise rally was chalked up to stronger Chinese imports and signs that a market that had been oversupplied for several years was back in balance.

China, which buys about two-thirds of seaborne iron ore, certainly did boost imports in 2016, buying more than 1 billion tonnes in a year for the first time, with overseas purchases of the steel-making ingredient rising 7.5 per cent.

There has been little let up in the pace this year, with imports from January to May jumping 7.9 per cent from the same period in 2016 to 444.6 million tonnes, putting them on track for an annual increase of about 65 million tonnes.

Imports look set to remain robust in June as well, with ship and port data compiled by Thomson Reuters Supply Chain and Commodity Forecasts pointing to arrivals of 93 million tonnes.

This number was filtered to show only vessels that have already discharged cargoes or are underway, and may be revised higher as late cargoes get added.

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