China mills' imported iron ore stocks hit record low

Inventories of imported iron ore sintering fines held by the 64 Chinese steelmakers included in Mysteel's weekly survey thinned further to 8.7 million tonnes by July 19, the lowest since Mysteel commenced the survey in July 2014. Also, not only did the decline during July 13-19 mark the fourth straight weekly fall but the pace of the fall jumped to 6.1% compared to the prior week's tiny 0.2% dip.

"When most steelmakers' iron ore use remained steady, their recent purchases of the raw materials have slowed," a Shanghai-based market source said simply to explain the reduction in fines stocks.

The daily consumption of imported sintering fines among these 64 mills rose to an average of 556,900 tonnes/day over July 13-19, Mysteel's survey showed. This represented a second on-week rise though the increase was by just a small 0.5%.

Consequently, the stocks of iron ore fines held by the 64 mills should last them for 16 days of use at their current daily consumption rate, unchanged from that over the prior survey period but being seven days fewer on year.

Steel mills have had to keep the run rates at their sintering machines steady in order to produce sufficient sintered ore to satisfy their presently high rates of blast furnace operations, Mysteel Global noted. Mysteel's monitoring of its sampled 247 mills nationwide showed that their daily hot metal output averaged 2.44 million t/d during July 7-13, being 8% higher on year.

On the other hand, the buying attitude among many mills towards iron ore has become more cautious recently, Mysteel Global noted.

Steelmakers will possibly reduce their hot metal output gradually in the near term, as the current off-season for steel consumption in summer will see finished steel stocks keep mounting, according to the Shanghai source.

The spot trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel's tracking decreased to 155,289 t/d on average during this week, 2% lower on week.

Written by Lea Li, liye@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.