September 13 -- China imported a total of 59.09 million tons of iron ore in August, an increase of 4.54 million tons, or 8.3 percent, from July, reports China Business News, citing the General Administration of Customs. Compared with August 2010, imports were up 32.5 percent.

For the first eight months, the country imported a total of 447.57 million tons of iron ore, up 10.6 percent year-on-year.

The average import price hit a new record high of $173.4 per ton in August, according to China Customs.

The high iron ore prices squeezed the profitability of large steelmakers including Baosteel (600019), Angang Steel (000898) and Maanshan Iron and Steel (600808), which recorded year-on-year falls in first half 2011 net profits.

The continued increase in domestic iron ore prices since June had driven some steelmakers to restart the procurement of imported one, pushing up the prices of imported iron ore.

At present, the spot price of iron ore had stayed at levels above $185 per ton for months, exceeding the price negotiated in the third quarter.

According to Xiben New Line Stock, the recent rise in the prices of domestic iron ore had led to some steelmakers restarting imports of higher-quality iron ore. The operating costs of mid and large-scale steelmakers rose significantly following the increase in the prices of imported iron ore.

Changsha Steel Factory, a major private steelmaker had reduced the ex-factory prices of its products by between 30 yuan and 70 yuan per ton for most of its products last week.

According to Yue Qiu, an analyst at Xiben New Line Stock, the domestic steel market is not expected to recover after the Mid-Autumn Festival due to the halt in high-speed railway construction and lower demand from the real estate market.