China, the world’s largest iron ore consumer produced around 119.2 MnT ROM (Run-of-mine) in Oct’16. Crude iron ore production slightly increased by 0.2% last month despite a steady increase in raw material prices throughout the month.
On Y-o-Y basis, crude ore production was down by 3% as it was 125 MnT in Oct’15. The decrease of 3% in crude iron ore production indicates that Chinese steel mills are more relying on imported ore as it is available at much cheaper prices by Australia and Brazil as compared to China’s domestic cost of production. However, the drop of 3% came at a time when iron ore imports grew by 7% Y-o-Y .
The total volume of crude iron ore production in the first 10 months of 2016 was registered at 1062.9 MnT, significantly down by 6% Y-o-Y as it was 1,133 MnT in the same period prior this year.
The country imported 843.5 MnT iron ore in the first 10 months of 2016, which was higher by 8.8% Y-o-Y. The country imported 774.8 MnT iron ore during the same period in 2015, which shows country’s increasing appetite for imported raw material.
Global iron ore prices also increased in the month of Oct’16. In Oct’16, the monthly average prices for Fe 62% Australian fines remained at USD 58.2/MT, up from USD 57/MT, CFR China in Sept’16.
It is to be noted that the country has mined 1.06 BnT of iron ore in the first 10 months of 2016, down by 3.2% as compared to same period last year.
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