Volumes traded on the Beijing Iron Ore Trading Center Corporation (COREX) from January to mid-September have risen 20 percent from the same time in 2017 to 24 million tonnes, and are on course to beat last year’s total of 33.6 million tonnes, said company president You Song.
The last quarter of the year is typically the strongest in terms of transactions on the platform, he said.
“Our target this year is 36 million tonnes, but we have a chance to break 38 million tonnes,” You told Reuters on the sidelines of an industry conference organized by the China Iron and Steel Association.
That would be a new annual high for the platform that began in 2012 and where cargoes from top iron ore suppliers Vale, Rio Tinto and BHP Billiton are among those sold. The last record of 35.35 million tonnes was set in 2016.
Despite production restrictions in many cities including top-producer Tangshan, China’s overall steel output only slipped 1.1 percent in August from a record 81.24 million tonnes in July, as many mills ramped up output to chase strong margins amid firm domestic demand.
“We think production of steel will remain stable, so demand for iron ore will remain stable,” said You.
Iron ore imports by China - the world’s largest buyer - have only dropped 0.5 percent to 710 million tonnes in January-August.
Apart from matching iron ore buyers and sellers on dollar-denominated cargoes, COREX also matches buyers and sellers on yuan-priced iron ore at China’s ports and has seen volumes increase from June, You said, reflecting increased interest for smaller shipments from mills and traders.
From potentially 500,000 tonnes in traded volumes this year for yuan-denominated cargoes, transactions could reach 2 million tonnes next year and probably 10 million tonnes by 2020, You said.
“Once the business takes off in the market, volumes will increase very fast,” he added.