- Output at Hebei province slumps by 23%
- Weak off-season demand lowers volumes
By region, ROM ore output in North China’s Hebei province, the country’s top iron ore-producing hub, slumped by 22.6% on year to 224.1 mnt during January-June, while ROM ore production in Northeast China’s Liaoning province also recorded a drop – albeit much smaller – of 2.1% y-oy, reaching 89 mnt, the NBS data shows.
In June alone, China produced about 89 mnt of ROM iron ore, 8.4% below the corresponding month last year, NBS data indicates.
On a monthly basis, however, ROM ore production in June rose 3.7% from May recording the third m-o-m increase, Mysteel Global calculated based on the NBS numbers. The increase last month can mainly be attributed to more domestic mining companies resuming operations after maintenance, particularly those in North and East China, market sources said.
Yet, China’s iron ore market last month was still weak, as the seasonal fall in steel consumption during summer undermined demand for the steelmaking material among mills, Mysteel Global notes. In addition, steelmakers tended to choose imported iron ore over domestic ore for the better cost performance of the former.
Consequently, daily consumption of domestic concentrates among the 114 steel mills under Mysteel’s tracking dropped to 171,900 tonnes/day on average during the last week of June, lower by 4.5% m-o-m.
The lukewarm demand for ore and improved availability together caused prices of domestic concentrates to slip further last month. On 30 June, Mysteel assessed the offered price of 66% Fe grade iron ore concentrates in Tangshan city, Hebei province, at RMB 869/dmt ($121/dmt), including the 13% VAT, marking a notable decline of RMB 51/dmt or 6% m-o-m.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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