China iron ore supply to be abundant in 2021 – CISA

China’s iron ore supply is expected to be abundant, as demand will decline with Beijing’s steel output cut while supply may incline among the overseas miners, Wang Yingsheng, deputy secretary general of China Iron and Steel Association (CISA), shared on March 25 at the 2021 International Iron Ore Market Seminar in Qingdao, East China’s Shandong province.

In late January, Beijing vowed to bring down crude steel output on year for 2021 while the country’s steel production grew 12.9% on year to 175 million tonnes over January-February.

“For the remaining nine months of 2021, we will have to lose the 30 million tonnes at least that we have gained in the first quarter,” Wang said, without commenting on the exact steel production cut target for Beijing for 2021.

The domestic steel production cuts will impose a greater impact on iron ore than coke, as per tonne steelmaking consumes around 1.6-1.7 tonnes of iron ore and 0.5-0.6 tonne of coke on average among the Chinese steel producers, he pointed out.

At the same time, though, global iron ore supply will be on the rise for 2021, he shared, quoting Mysteel’s projection that the added iron ore supply will be at around 130 million tonnes with the new start-ups and resumption of mainstream mines.

As for the world’s top iron ore miners, Vale, the top iron ore producer confirmed at the Thursday event that it targets to increase its iron ore output to 315-335 million tonnes/year in 2021 from 300.4 million tonnes in 2020, and the Brazilian miner will progress steadily towards its 400 million t/y capacity target by 2022, Eduardo de Mello Franco, marketing manager of Vale, repeated at the Qingdao event.

Other than the existing miners, “high iron ore prices will prompted those (mines) that have suspended operations to restart and those under construction to accelerate the pace,” Wang said.

Zhi Hailei, from Mysteel’s iron ore department, shared in details regarding the added supply at the Qingdao event.

“The resumption of mainstream miners will contribute most to the iron ore output increase,” she commented, expecting the total added volume from Brazil at be around 26.7 million tonnes, with Samarco and CSN in Brazil to return to their pre-epidemic production levels, adding another 6.5 million tonnes and 5 million tonnes respectively, producing 7.5 million tonnes and 38 million tonnes for 2021.

India and Australia may see their iron ore production up 25 million tonnes and about 17 million tonnes respectively on year for 2021, Zhi added, noting that in Australia, eight new mining projects plan to go on stream by this year, adding at least 14 million tonnes of iron ore output.

Besides, China’s domestically-produced iron ore will grow too, as over January-February, China’s domestic raw ore output increased 10.3% on year to 129 million tonnes, and imported steel scrap and pig iron will be supplements, substituting some iron ore consumption too, Wang pointed out.

Zhi agreed, anticipating China’s iron ore concentrates output to grow by 20 million tonnes on year for 2021.

(Source: Mysteel)

Written by Olivia Zhang, zhangwd@mysteel.com and Lindsey Liu, liulingxian@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.