China mills’ iron ore use hits 7-month high

The daily consumption of imported iron ore sintering fines at the 64 Chinese steel mills under Mysteel’s survey hit a seven-month high of 533,200 tonnes/day over March 31-April 6, up by 18,800 t/d or 3.7% on week. Some steelmakers in Tangshan were able to buy and consume more ore during the week, market sources said, thanks to the mild easing of transportation controls imposed earlier to slow the spread of COVID-19.

Among the six surveyed areas and regions, mills in Tangshan in North China’s Hebei saw their daily use increase the most, jumping by 15,900 t/d or 11.8% on week to 150,100 t/d over the same survey period, Mysteel’s survey showed.

“Those mills that were forced to scale back their production amid a shortage of iron ore and other raw materials finally received some tonnage last week, after they had obtained special ‘vehicle passes’ that allowed their trucks to pass through roadblocks to deliver raw materials,” explained a Shanghai-based analyst.

Tangshan’s authorities had imposed traffic controls on all roads in its administrative area from March 20 to contain the resurgence in COVID-19 cases in the city, with only some vehicles for special or emergency use being allowed to pass, as reported.

As a result of these mills’ replenishment of iron ore, stocks of imported sintering fines at the surveyed mills in Tangshan grew by 215,700 tonnes or 14.3% on week to 1.7 million tonnes as of April 6, according to Mysteel’s survey.

Nevertheless, inventories of these fines stockpiled at the 64 steel mills Mysteel sampled in the survey increased by a small 135,700 tonnes on week to 14.8 million tonnes, as the growth from mills in areas such as Tangshan was offset by the decrease in stocks being nursed by mills along the Yangtze River.

The analyst was not surprised at the decrease in riverside stocks at Yangtze ports as mills here receive less seaborne iron ore.

Over March 31-April 6, the inventories of iron ore fines held by the 64 steel mills were sufficient for 25 days’ use at their present daily consumption rate, one day less than during the last survey period.

Written by Lea Li, liye@mysteel.com

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