China: Iron ore ROM output slumps by 15% y-o-y in Q1CY’25

• Miners keep production low amid weak profits
• Concentrate offers fall by $24/dmt y-o-y in Q1CY’25

Mysteel Global: China’s iron ore run-of-mine (ROM) output totalled some 244 million tonnes (mnt) in the first quarter of this year, falling by a sharp 14.6% from the same period last year, according to the latest statistics from the country’s National Bureau of Statistics (NBS).

Significantly, ROM output in North China’s Hebei province, the country’s top iron and steel production hub, dropped steeply by 28% y-o-y to 109.7 mnt in the past quarter, while Northeast China’s Liaoning province also saw its ROM production fall by 7% y-o-y to 43.7 mnt.

For March alone, China produced 83.5 mnt of ROM iron ore, 5.5% higher than the average monthly output of 79.2 mnt recorded during January-February, Mysteel Global calculated based on the NBS data. However, the March tonnage still logged a slump of 14.9% on a y-o-y basis, according to the official data.

In fact, Chinese iron ore miners have largely kept their production at lower run rates since the beginning of this year. For example, the capacity utilisation rate among the 186 Chinese mining enterprises under Mysteel’s tracking averaged 60.5% during January-March, in comparison to 62% during the same period last year.

“The reason behind the modest production willingness among miners might be their thin profits caused by the weaker performance of domestic iron ore prices,” a Shanghai-based iron ore analyst suggested.

Over the past quarter, offers for 66% Fe grade domestic concentrates in Tangshan in Hebei province under Mysteel’s assessment averaged RMB 962/dry metric tonne (dmt) ($132/dmt) exw, including 13% VAT, down by a hefty RMB 174/dmt ($24/dmt) from the average of RMB 1,136/dmt ($156/dmt) during January-March 2024.

Meanwhile, the decline in ROM output nationwide in Q1 also led to lower production of domestic iron ore concentrates. For instance, iron ore concs production at the 332 Chinese mining companies sampled in Mysteel’s survey dropped by 5% y-o-y during January-March to 62.6 mnt, the lowest quarterly output for the Q1 period since 2021.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.