- Heavy rains, maintenance stoppages lead to drop
- Conc. output shrinks, prices rise on firm demand
Mysteel Global: China produced 81.6 million tonnes (mnt) of run-of-mine (ROM) iron ore in August, with the volume rising by 8.8% y-o-y but falling by 4.7% from July, according to new data released by the country’s National Bureau of Statistics (NBS).
The on-month decline was mainly attributed to frequent maintenance stoppages at mines during the past month. Apart from routine overhauls, mines in many parts of the country were impacted by torrential rains last month that forced mining firms to suspend operations and conduct maintenance instead, market sources said.
Specifically, ROM iron ore output in Hebei province, China’s top iron ore producing hub in North China, fell by 7% m-o-m to reach 34.3 mnt last month, while that in Northeast China’s Liaoning province, China’s second largest ore-producing province, dropped by 4% from July to 14.5 mnt, the NBS data show.
The shrinking supplies of ROM iron ore also resulted in lower production of domestically produced iron ore concentrates. Mysteel’s tracking of 186 domestic mining companies nationwide showed that their daily output of iron ore concs averaged 468,500 tonnes (t)/day during the last week of August, down by 5,500 t/d or 1.2% m-o-m.
In contrast, demand for iron ore among domestic steelmakers was firm in August, as mills maintained their hot metal production at elevated levels to chase healthy profits on steel sales, as reported.
Consequently, prices of domestic iron ore concs climbed markedly last month thanks to strong fundamentals. For instance, on 29 August, Mysteel assessed offers for 66% Fe grade iron ore concentrates in Tangshan in Hebei at RMB 989/dmt ($139/dmt) exw and including 13% VAT, higher by a notable RMB 60/dmt from a month earlier.
China’s accumulative ROM iron ore output during January-August reached 678.1 mnt, lower by 4.2% compared with the same period last year, the NBS data also show.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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