China mines' iron ore output edge up further

Domestic production of iron ore concentrates among the 186 Chinese mining enterprises canvassed in Mysteel's bi-weekly survey increased for the second period over November 18-December 1, albeit by a small 2,100 tonnes/day on fortnight to an average of 447,300 t/d.

Accordingly, the concentrating capacity utilization rate among the sampled miners also edged up 0.3 percentage point from the previous period to 57.3% over the survey fortnight.

More miners and concentrating plants resumed operations in Northeast, East, and Northwest China, where the spread of the COVID-19 pandemic has been effectively contained, market sources reported.

Mysteel's data showed that daily concs production among the 24 surveyed miners in East China averaged 53,600 t/d over November 18-December 1, up 1,000 t/d from the previous period, with their capacity utilization rate being 1.2 percentage points higher on fortnight and reaching 63.7%.

On the other hand, blast furnace (BF) steel mills - especially those in the country's northern and eastern regions - cut their production further during the two weeks due to their losses on selling finished steel, Mysteel's survey showed. The capacity utilization rate among the 247 BF mills tracked by Mysteel had lost another 0.7% percentage point on fortnight to 82.62%, the latest data showed.

As such, steel mills continued to maintain low stocks of iron ore and were more cautious about purchasing iron ore concentrates as domestic concs suppliers had lifted their offering prices, Mysteel Global learned.

For example, as of December 1, the offering price of 66% Fe grade domestic concentrates in North China's Tangshan had gained Yuan 37/dmt ($5.3/dmt) on fortnight to reach a one-month high of Yuan 918/dmt EXW and including the 13% VAT.

With the uptick in output and the decline in consumption, total inventories of iron ore concs among the 186 sampled miners edged up during the survey period, rising 5,400 tonnes on fortnight to reach 2.83 million tonnes as of December 1, according to Mysteel assessment.

Written by Anthea Shi, shihui@mysteel.com

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