The value of China’s iron ore imports hit new heights in August even as policymakers try to cut steel production and calm commodity prices, likely boosting Australia’s exports despite the tensions between the two nations.
China imported iron ore worth a record $20 billion in August, according to government data released Tuesday, as prices surged from a year earlier. Total volumes were 97.5 million tons.
It was also a record month for the value of China’s overall imports from Australia, with much of that likely coming from shipments of the red dirt. The detailed breakdown will be released later this month, but Australian miners typically supply more than 60% of China’s demand.
The record comes despite the growing tensions between the two nations, with China blocking or limiting various Australian exports in retaliation for diplomatic slights. The Australian economy has shown resilience in the face of China’s actions, Treasurer Josh Frydenberg said earlier this week, with producers quick to redirect trade to other markets.
However, iron ore prices have fallen from their May peak and demand from China may be weaker in the second half of this year on weak demand from the property sector and steel industries. Some of the increase in imports is likely due to the improvement in shipments from Brazil since July and rising inventories.