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Low prices tempt steel firms

China's iron ore imports jumped to an all-time high last month, customs data showed yesterday, as steel makers and traders bought more at lower spot prices.

Last month's imports of 52.08 million tons represented a 46.2-percent increase from a year earlier and up 11.4 percent from February.

Imports for January-March rose 19 percent to 131.53 million tons, but were down 26.9 percent in value from a year earlier, according to the General Administration of Customs.

This indicated that mills were buying heavily amid tumbling spot market prices, while price negotiations on annual term prices between the world's top three iron ore miners and major Chinese steel customers are locked.

But it doesn't necessarily mean the steel market is bouncing back.

China exported 1.67 million tons of steel products last month, up 7 percent on month but tumbling 60 percent on year, while its imports rose 17 percent from the previous month to 1.27 million tons, the customs said.

China imported 460,000 tons of steel billet last month, while exports were zero. "This shows China has become a monthly net importer of steel for the first time since 2006," said Umetal Research Center analyst Hu Yanping. "The situation is severe. There is a long way ahead for the steel market to recover."

Domestic mills increased steel production from December to the end of February, but it proved short-lived.


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