China’s stocks of iron ore concs at new low

Posted on 08 February 2021

Stocks of iron ore concentrates at the 186 sampled Chinese mining companies fell to 1.6 million tonnes as of February 4, hitting a new low since Mysteel commenced the stocks survey in January 2019. Lower output among miners and buoyant sales to steel mills led to the decline, according to Mysteel’s latest release.

During the survey period of January 22-February 4, the in-plant stocks of concentrates at the surveyed miners dipped for the eighth week, dropping by another 77,100 tonnes or 4.5% on fortnight, the results showed.

During the same period, daily output of concentrates at these mining companies reversed down after the prior fortnight’s rise, declining by 4,500 tonnes/day over the two weeks to an average of 510,100 t/d, a nine-month low. The miners’ concentrating capacity utilization rate was also at a nine-month low of 65.33%, lower by a small 0.58 percentage point after the previous fortnight’s 0.06 percentage point growth.

Miners in most regions of China saw decreases in their daily output last week as some mines had halted operations earlier to allow employees to begin travelling to their hometowns ahead of the Chinese New Year (CNY) holiday next week.

Among the seven regions surveyed, the largest output decline was among miners in North China as concentrating plants there were halted temporarily due to insufficient run-of-mine ore supplies, Mysteel noted.

Meanwhile, some miners in Northeast China were obliged to halt their production last week which was also reflected in the lower daily output of concentrates. “The reoccurrence of COVID-19 in the three provinces in Northeast China was responsible for the suspension of work at some mines,” according to a Shanghai-based market watcher. Freezing weather conditions in the region during the past two weeks also impacted production as low temperatures make mining more difficult, she said.

Besides the falling daily output, demand for concentrates among steelmakers stayed firm during the survey week, with steelmakers continuing to stockpile in large quantities to fulfill their replenishment plans before the CNY break. At the same time, mines had been actively selling off their stocks on noting the high price of concentrates recently. Sales turned robust as a result.

By February 5, the offering price of 66% grade concentrates in Tangshan, North China’s Hebei province, had increased by Yuan 43/dmt ($6.6/dmt) from January 22 to reach Yuan 1,278/dmt EXW and including 13% VAT.

Source : Mysteel Global