China iron ore imports grow in the double digits in November

China imported 92Mt of iron ore in November, up 12.0% year-on-year and up 13.0% month-on-month, Barclays said in a note to clients, citing Chinese customs service data.

The UK lender said the figure was the third highest import total ever.

"The rise in raw material costs, such as met coal, and the switch to high quality ores has eroded domestic steel mill profitability, which we estimate to be around 47% of the industry," Barclays said.

"This preference for higher quality ores, as opposed to the lower quality domestic ores, may be driving the recent high import numbers," the lender added.

London-based research firm Capital Economics said the rise in the prices of many industrial commodities played a key role in the recovery in imports in value terms.

"However, commodity import volumes also rose strongly," Capital Economics senior commodities economist Caroline Bain said in a report on Tuesday.

"Looking at the bigger picture, China's commodity imports have grown solidly year-to-date. Admittedly, some of the gains reflect domestic supply constraints rather than rising demand," she added. "The surge in China's coal imports is related to lower domestic mine supply, although demand has also picked up recently in response to colder-than-average weather. Similarly, the growth in iron ore imports has a lot to do with lower domestic output as well as a preference for higher-grade imported ore."

China's iron ore imports come mainly from Australia and Brazil. The two countries accounted for about 85% of the iron ore imported by China last year, compared with about 70% at the beginning of 2014.

Exports of Brazilian iron ore to China over the first 11 months of the year increased 23.9% year-on-year to 192Mt as revenue rose 19.2% to US$6.21bn, foreign trade department Secex said. Overall, in November Brazil's iron ore exports rose 37% year-on-year by value.