According to Chinese customs authorities, iron ore imports for August came in at 96.2 MMT, up 5.4% MOM while down 1.3% YOY, taking the YTD total to 723.4 MMT, which is down 3.2% compared to 2021 and 4.8% compared to 2020. Despite being somewhat down YTD YOY, the YTD total is broadly in line with its 5-year average of 723.6 MMT.

Furthermore, coal imports came in at 29.5 MMT for August and showcased an increase of 25.3% MOM and 5.4% YOY while still down 15% YTD YOY, as domestic coal production continues at elevated levels. In our view, the MOM and YOY increase in coal imports are explained by the widespread domestic heat waves, which have led to rising coal-fired power generation amid surging demand for air conditioning. However, industry sources state that the coal-fired power generation has gradually declined lately as temperatures have fallen and Covid-19 restrictions have hampered industrial activity.