Posted on 14 Jul 2021
For July-December, China’s domestically-produced iron ore concentrates may reach 152-154 million tonnes, or up 6-8 million tonnes on year and resulting in an added supply of 13-15 million tonnes for the whole 2021, as the domestic iron ore mining operations are expected to be smooth after a bumpy H1, and the newly-commissioned projects will be able to deliver products to the market, Mysteel shared its outlook.
Mysteel has cut its projection on added domestic iron ore supplies for the whole 2021 from the original 20 million tonnes, as for H1, the domestic mines’ production had been seriously affected by the mining accidents, growing only 6.8 milllion tonnes on year to 136 million tonnes.
For H2, “the adverse impact of environmental protection on the domestic iron ore mining operation will recede further thanks to the mines’ upgrading and rectification efforts in the past few years, and the domestic mines will be paying greater attention to the workplace safety, which will result in the less disruption to both the production and construction of the new iron ore projects,” Mysteel elaborated.
The gold mine accidents in Shandong in February and the iron ore mining accident in Daixian, North China’s Shanxi province, in June led to rounds of production halts and workplace safety checks at China’s mining operations including iron ore over January-June, and China’s domestic iron ore concentrates output especially in the second quarter had been lower than expected, Mysteel explained.
Besides, “remaining firm demand and high margins will spur the domestic iron ore miners on to ramp up their output, and for H2, China may produce 152-154 million tonnes of concentrates, up 16-18 million tonnes from H1,” Mysteel projected, adding, though, that both the domestically-produced and imported iron ore prices may soften in H2, as supplies from both the sectors may grow 87 million tonnes in total to 775 million tonnes, while demand may be at 738 million tonnes.
The first half of 2021 had been a booming period for China’s domestic iron ore miners, as the price of 66% grade iron ore concentrate in Tangshan, North China’s Hebei, for example, surged 39% on year against a 36% on-year gain in the price of the 62% grade Australian fines at the Jingtang port under the jurisdiction of Tangshan, and the price of the 66% grade iron ore concentrates in Tangshan, thus, was Yuan 300/t higher than that of PB fines in Jingtang port on March 9, or the largest price spread so far in 2021, while on May 10 the spread was at a negative Yuan 85/t, the report said.
Source:Mysteel Global
