China's iron ore imports rebounded in May after a dip the previous month, as steel mills ramp up output to cash in on strong margins despite environmental curbs across the country. Shipments of the steelmaking raw material in May rose 13.5 percent from April to 94.14 million tonnes, data from the General Customs of Administration showed on Friday. That compares to 91.52 million tonnes in the same period last year.
For the first five months, China bought a total of 448 million tonnes of iron ore. The world's largest steelmaking country has been churning out products since winter output curbs to tackle smog were lifted in late March. Daily crude steel output by major steel mills in May 1-20 hit a record 1.96 million tonnes, according to data from China's Iron & Steel Association (CISA).
The average profit margin at Chinese mills was around 700 yuan ($110) a tonne last month, up more than 16 percent from April, according to data from the Mysteel consultancy. But accumulating iron ore stockpiles at Chinese ports have put pressure on traders to buy less from abroad. By June 1, iron ore stocks hit a record 161.98 million tonnes, ahead of the previous record of 161.68 million tonnes in late March, according to data compiled by SteelHome.
"The iron ore market is still experiencing oversupply due to high inventory at ports and lower-than-expected demand amid environmental inspections," said CISA in a note.