Posted on 23 Jun 2021
China’s run-of-mine (ROM) iron ore output refreshed its three-year high in May, reaching 87.6 million tonnes, up 14.4% on year and 0.8% higher on month, though the total output over January-May at 405.8 million tonnes, grew more slowly at 17.9% on year than the 18.6% on-year gain for the first four months, Mysteel Global noted from the data of the country’s National Bureau of Statistics (NBS).
“The outrageously high iron ore prices also for domestic iron ore concentrates led to very handsome margins in May, and China’s domestic iron ore miners, thus, had been ramping up their production as much as they could, and until now, demand from the domestic steel mills has remained robust,” a Shanghai-based market watcher commented.
Over May 13-14, Mysteel’s 66% grade iron ore concentrates price in Tangshan, North China’s Hebei, for example, hit Yuan 1,700/dmt ($263/dmt) EXW and including the 13% VAT, or an all-time high since Mysteel commenced the assessment in July 2006, and its monthly average price for May, thus, was at Yuan 1,550/dmt, or up Yuan 256/dmt on month.
China’s domestically-produced iron ore concentrates prices are rarely above Yuan 1,000/t most of the time for the past many years, and the exceptionally high prices so far this year mean high profits with many having their production costs estimated at Yuan 600-800/t, Mysteel Global understands.
Mysteel’s survey among China’s 332 mining companies has drawn a similar picture in their iron ore concentrates output, which grew 7.5% on year to around 113 million tonnes over January-May with the volume for May alone up 3% on year or up 3.2% on month to 24 million tonnes.
Even with higher output, “many miners are with very low iron ore concentrates stocks as demand has been very firm,” an official from an iron ore miner in North China’s Hebei remarked.
Mysteel’s latest survey showed that iron ore concentrate stocks among the 186 Chinese mining companies slid further over June 4-17 to a new low of 1.2 million tonnes since the start of the tracking in January 2019.
In June, China’s ROM iron ore or concentrates output, however, may decrease on month, as Shanxi in North China, or a major iron ore mining base, is going through a thorough workplace safety inspection in response to a fatal accident at an underground iron ore mine in the province on June 10 that killed 13 miners.
Shanxi produced 35 million tonnes of iron ore concentrates in 2020, or accounting for 12% of the country’s country’s total volume, Mysteel’s data showed.
Source:Mysteel Global
