Posted on 25 May 2021
Iron ore concentrate stocks among the 186 Chinese mining companies under Mysteel's survey continued to dip during May 9-20, falling by 45,100 tonnes or 3.1% from that over April 23-May 8 to 1.4 million tonnes and refreshing a two-year low, according to new data released on May 21. On the other hand, the daily output at those miners increased over the period, the data show.
Although domestic iron ore prices saw some downward corrections over the past week, prices had been hovering high since mid-April and these had led the miners to actively sell off their inventories, said a Shanghai-based analyst. Also, the steel mills’ demand for domestic iron ore was robust given the ore’s cost-effectiveness when compared with imported cargoes, which resulted in some mines selling out their stocks at hand, she explained.
The offering price of 66% Fe content concentrates in Tangshan, in North China’s Hebei, rose by Yuan 30/dmt ($4.7/dmt) from May 10 to reach Yuan 1,580/dmt EXW and including the 13% VAT as of May 20. Meanwhile, Mysteel SEADEX 62% Australian Fines stayed above $200/dmt CFR Qingdao over May 10-20 and hit $233.7/dmt CFR Qingdao on May 12, a record high since Mysteel started tracking the seaborne price in January 2010.
“The demand for domestic iron ore concentrates from pelletizing plants also improved over the past two weeks, as they ramped up their production when they could enjoy healthy margins amid the firm prices of pellets,” she added.
On the other hand, the daily output of concentrates at the 186 sampled mining companies climbed by 3,200 tonnes/day from that as of May 8 to reach 536,600 t/d as of May 20. Accordingly, the miners’ concentrating capacity utilization rate rose by 0.42 percentage point from the prior survey period to average 68.73%, also as of May 20.
“Miners in (Northeast China’s) Liaoning have resumed operations gradually after the central government’s environmental inspections ended on May 6,” the analyst also explained, adding that in addition, miners in East China’s Shandong had resumed production over the survey period. Their operations had been disrupted when the two gold mining accidents in the province early this year led the local government to initiate safety checks on mines, disrupting production, as reported.
Some Shandong miners also restarted work after maintenance stoppages ended in early-May, Mysteel Global notes.
Source:Mysteel Global
