Imports of iron ore in China in June are at their lowest since February 2016

BEIJING (Reuters) – Chinese imports of iron ore fell in June from their lowest level since February 2016, according to customs data released on Friday, while major miners in Brazil and Australia declined.

Arrivals of raw material steel amounted to 75.18 million tons last month, less than 83.24 million tons imported in June 2018 and 83.75 million tons in May, according to the data of the African Union. 39, General Administration of Customs, published Friday.

For the first half of the year, the largest consumer of iron ore in the world brought 499.09 million tons of ore, down 5.9% compared to the same period last year, have showed the customs data.

Supply from Brazil declined following the deadly break-up of a tailings dam in January. Rio Tinto (RIO.AX) (RIO.L), the world's largest producer of iron ore, has reduced its forecast of 2019 shipments from the Australian region of Pilbara due to operational problems.

Both countries are the largest suppliers of iron ore to China.

The stocks of iron ore imported in Chinese ports fell at the end of June to a minimum of 115.25 million tons for two and a half months, according to data compiled by SteelHome Consulting. It rebounded slightly to 115.6 million tonnes last week.

"The iron ore supply may not see much improvement as some miners have scheduled maintenance work in the coming months, while Vale's production is not expected to increase sharply in the short term" said Richard Lu, an badyst at CRU in Beijing.

China's demand for iron ore could be mitigated, as major Chinese steel cities tighten their anti-pollution measures, including reducing steel mills' production, while local authorities face increasing pressure to meet targets quality of the air.

Utilization rates in China's steel mills fell to 66.02 percent Friday, the lowest since late March, showed data compiled by Mysteel's consultants.

"With steel's superior cutting capacity of the steel hub, mills in other regions could seize the opportunity to increase production. In this sense, the total demand for iron ore in China may not fall too much, "said Lu.