Investors should keep an eye on Japanese iron ore imports

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Japan’s iron ore market

Japan accounts for between 10% and 13% of the seaborne market. So Japanese iron ore imports are another good indicator of iron ore demand.

Japan iron ore imports

Japan’s Ministry of Economy, Trade and Industry releases the data for Japanese iron ore imports on a monthly basis. Japan’s iron ore imports for the month of September were 11.09 million tons, which is a drop of 5% month-over-month and 2.1% year-over-year. The average price of iron ore imports was 12,482 Japanese yen per ton, down by 5.9% compared to the corresponding period last year.

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Low prices fail to entice

Japan’s cumulative iron ore imports during the initial nine-month period of the year totaled 101.39 million tons, remaining more or less flat with the 101.37 million tons imported between January and September last year.

Japan hasn’t taken advantage of lower iron ore prices, which are down ~46% year-to-date. The overall picture indicates negative to moderate demand for iron ore in Japan.

Weak demand from major consumers such as China and Japan is putting more pressure on iron ore prices. It’s also negatively impacting iron ore companies in the seaborne trade, including Rio Tinto plc (RIO), BHP Billiton Limited (BHP), Vale SA (VALE), and Cliffs Natural Resources Inc. (CLF). It’s also affecting funds investing in these stocks such as the SPDR S&P Metals and Mining ETF (XME).

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