China’s Dalian and Rizhao ports are feeling the strain of lower iron ore imports over January-June as a result of the country’s slowing steel production.
Iron ore throughput at Dalian port in northeast China’s Liaoning province fell 11.2% year on year in January-June to 8.29 million mt.
Revenue from the port’s iron ore business fell 26.1% year on year to Yuan 95.6 million ($14.9 million) in H1 2015.
Besides China’s weaker steel sector, throughput also fell because importers opted to use other ports amid rising costs for road and rail transportation from Dalian, the Shanghai-listed operator said in a half-year report Wednesday.
China’s overall iron ore imports fell a much smaller 0.9% or 3.9 million mt to 452.9 million mt over January-June on lower demand from steel mills, according to customs data.
In H1 2014, by contrast, China’s iron ore imports surged 19.1% year on year.
Market sources do not expect iron ore imports to recover in H2 2015 due to sustained low steel output.
Rizhao port in eastern China’s Shandong province posted a 43.6% year-on-year drop in net profit to Yuan 226.1 million over January-June, it said in an August 18 report.
Throughput of metallurgical ore at Rizhao fell 23.7% year on year to 59.2 million mt in H1 2015, compared with a 17.9% year-on-year drop to 105.9 million mt for all commodities.
No breakdowns were given for iron ore and nickel ore, but iron ore usually accounts for more than 80% of ore imports, a Rizhao port official said.
Dalian said it would try to weather the market conditions by attracting more 400,000-dwt very large ore carriers, or VLOCs, to its terminals for iron ore deliveries with or without blending to the steel mills in northeast China and around the Bohai Sea area.
VLOCs are mostly deployed for Vale’s iron ore shipments from Brazil to China.
Rizhao port hopes a new terminal project under construction at Shandong Iron & Steel’s nearby 8 million mt/year new integrated steel site will increase iron ore business at the port.
The terminal will accommodate 300,000-dwt vessels and VLOCs. It is designed for 20.7 million mt/year handling capacity and will be paired with two multipurpose terminals for 40,000-dwt vessels and five terminals for 10,000-dwt vessels totaling 8.5 million mt/year of throughput to facilitate iron ore transshipments and steel exports.
Source: Platts
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