Inventories of iron ore concentrate at the 186 sampled Chinese mining companies rose over November 8-21 to its seven-month high of 3.95 million tonnes, mainly as their continuing efforts in ramping up output, while steel mills in North and East China had limited appetite for consumption, and those in Northeast China have almost finished restocking for winter, according to Mysteel’s latest survey release.
This has been for fourth fortnight growth in the miners’ concentrates stocks with the latest growth being 97,000 tonnes or 2.5% over two weeks, as their capacity utilization grew further by 0.68 percent to 64.51% as of November 21 and their daily output, accordingly, grew further for the third survey period, up another 5,300 tonnes/day or 1.1% on a fortnight to 503,700 t/d, also a nearly three-month high.
Most iron ore miners in North, East and Central China under the survey have been ramping up their output after they have been freed from production restrictions since early November, and those in Tangshan, North China’s Hebei province, has just returned to normal operations on November 8 after one-week suspension together with the local steel mills at the start of this month due to poor local air quality, an official from a local mining operation confirmed.
At the same time, most steel mills in North and East China stayed on the sidelines as domestically-produced iron ore concentrates which lacking pricing competitiveness against imported cargoes, and an official from a mine in Shandong of East China admitted that “the inventories have been growing, but still within a reasonable range”.
As of the November 21, steel mills in Shandong needed to pay Yuan 795/dmt ($113.1/dmt) EXW for the domestically-produced 65% grade concentrates, while the 62% grade imported iron ore was sold at Yuan 605/wmt FOT Qingdao, or equivalent to Yuan 728.9/dmt, both including the VAT, according to Mysteel’s data.
Some steel mills in western Liaoning of Northeast China have confirmed finishing restocking for the winter months, and local miners, to deal with little demand, have decided to halt their operation starting December, earlier than previous years, Mysteel Global understands.
Over November 7-21, Mysteel’s bi-weekly survey among a smaller sample of 126 Chinese iron ore mining companies showed their concentrating capacity utilization rate up further by 0.29 percentage points to 63.25% or a two-month high, and their concentrates stocks up another 22,000 tonnes on a fortnight to 1.82 million tonnes, or approaching a three-month high.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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