China produced about 20.26 million tonnes of iron ore concentrates in February, rising by a small 26,000 tonnes or 0.1% on month, according to Mysteel’s monthly survey among 332 Chinese mining companies. Meanwhile, the volume was 2% higher than in February 2022.
The small on-month increase occurred because surveyed mining companies in regions including North China resumed production while the rise in their output was partly offset by the decline in concentrates output in Northeast China, Mysteel Global noted. This year’s Chinese New Year holidays falling between January 21 and 27 would also have resulted in February output being high on month.
Specifically, some miners in Handan and Xingtai cities in North China’s Hebei gradually resumed mining operations from February 3, after the months-long ban on the local distribution of explosives was finally lifted, as reported. All mining operations in the two cities were suspended from last October for the safe staging of the Communist Party of China’s plenary meeting in nearby Beijing and to ensure that air quality was good.
Also last month, production had resumed at some mining companies in East and South China after miners had returned to work from their hometown visits following the end of the CNY holidays, as reported. During 2022, CNY fell in early February, so an on-year rise in output last month might also have been expected.
On the other hand, iron ore mining operations in Northeast China were disrupted last month due to heavy snow and freezing cold weather, according to a Shanghai-based market source.
Meanwhile, though concentrates output among iron ore miners was largely steady, domestic mills’ demand for those concentrates grew last month, she observed. Those steelmakers bringing blast furnaces back online after the CNY holiday needed ready access to feeds so concentrate stocks at mining companies thinned.
Concentrate inventories at the 186 Chinese mining companies under Mysteel’s weekly survey decreased markedly in February, reaching 2.5 million tonnes by February 23 and down by 7% on month.
Domestic mining companies then raised offering prices of their concentrates last month, leveraging the reduced availability and the mills’ firm demand, Mysteel Global noted.
As of February 28, the offering price of 66% Fe grade domestic iron ore concentrates in Hebei’s Tangshan had increased by Yuan 21/dmt ($3.1/dmt) on month to reach Yuan 1,063/dmt EXW and including the 13% VAT, according to Mysteel’s assessment.
Written by Lea Li, liye@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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