China mills' imported iron ore use flat, stocks grow

Daily usage of imported iron ore sintering fines among the 64 Chinese steelmakers surveyed by Mysteel remained largely steady at 579,200 tonnes/day on average during August 3-9, down by just 0.3% on week. And the stocks of those fines nursed by the same mills increased modestly over the same period.

The slight drop in sintering fines use was because when sintering operations among steelmakers in North China's Shanxi and East China's Shandong edged down over the period, those in regions such as Tangshan in North China's Hebei further resumed their sintering machines from the maintenance stoppage in July, the survey showed.

For example, steel mills in Tangshan consumed an average of 181,000 t/d of imported fines over August 3-9, with the usage rising for the second period though by a smaller 2.2% on week as compared with the prior period's 14.5% gain.

In fact, many steel mills' consumption of iron ore was largely stable recently, corresponding to the steady operation of their blast furnaces (BFs), a Shanghai-based market watcher observed.

The BF capacity utilization rate among 247 Chinese steel mills under Mysteel's weekly tracking edged up by 0.23 percentage point on week to 90.05% over July 28-August 3, ending three straight weeks of declines, the latest survey showed.

On the other hand, inventories of imported iron ore sintering fines piled at the 64 mills accumulated by 2.8% on week to reach 8.9 million tonnes by August 9, though still being 29% lower on year, according to Mysteel's tracking.

Some steel mills in South China received large quantities of seaborne cargoes over the period, the source explained.

The existing stocks of imported sintering fines at these mills, therefore, should be sufficient to last them for 15 days at their current consumption rate, unchanged from the prior period while still serving as the shortest since Mysteel launched the survey in July 2011.

Nevertheless, cautiousness has grown among most steelmakers recently regarding iron ore procurement, as they worry that they may be ordered by government authorities to control their annual crude steel output in the coming months, Mysteel Global noted.

Meanwhile, the recent shrinkage in some mills' steel margins also led them to slow their iron ore buying in both portside and seaborne markets, as reported.

For example, China's national price of HRB400E 20mm dia rebar assessed by Mysteel had experienced nine consecutive working days of falls to Yuan 3,780/tonne ($524.3/t) including the 13% VAT by August 9, down by a total of Yuan 92/t on week.

Written by Lea Li, liye@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.