Japan’s iron ore market
Japan accounts for 10%–13% of the seaborne market, so Japanese iron ore imports are another good indicator of demand.
Japan’s Ministry of Economy, Trade, and Industry releases data for Japanese iron ore imports on a monthly basis. Japan’s iron ore imports totaled 12.05 million tons in December 2014 compared to November’s 11.31 million tons, up 8.7% year-over-year and 6.5% month-over-month.
For the full year 2014, Japan imported 136.44 million tons of iron ore. This was a 0.5% increase from 2013. So, iron ore imports in 2014 remained more or less flat.
Japan hasn’t taken much advantage of lower iron ore prices, which were down about 49% in 2014. The overall picture indicates a negative to moderate demand for iron ore in Japan.
Weak demand from major consumers of iron ore is putting more pressure on iron ore prices. It also negatively impacts iron ore companies in the seaborne trade, including Rio Tinto (RIO), BHP Billiton (BHP), Vale SA (VALE), and Cliffs Natural Resources (CLF). Lower demand also affects funds like the iShares MSCI Global Metals & Mining Producers ETF (PICK). All listings of BHP and RIO make up 30.7% of PICK. The SPDR S&P Metals & Mining ETF (XME) also invests in metals and mining companies.