China mines' iron ore output hits 5-month low

Domestic production of iron ore concentrates among the 186 Chinese mining enterprises canvassed in Mysteel's bi-weekly survey dropped for the third straight period over September 9-22 to hit a five-month low of 482,900 tonnes/day, down 14,300 t/d on fortnight.

Accordingly, the sampled miners' concentrating capacity utilization rate posted a third successive on-fortnight decline, slipping by another 1.8 percentage points to average 61.9% over the same period.

Various factors contributed to the domestic mines cutting production over the past two weeks, according to market sources.

In Northeast China for example, COVID-19 cases continued to increase, prompting authorities to introduce stricter measures to limit transportation and population movement, which caused some local mines to halt mining operations, as reported.

Meanwhile, in North China's Hebei and Shanxi, most mining companies suspended production to conduct government-mandated safety inspections after two accidents occurred on September 2 that killed 14 workers and left another four missing, Mysteel Global learned.

Moreover, the safety inspections in Hebei have been reinforced to ensure that no disaster mars the staging of the 20th Congress of China's Communist Party from October 16, a market analyst based in Tangshan in Hebei noted.

"From mid-September, local governments in Hebei halted the distribution of explosives to mining enterprises throughout the province and it's not known when the ban will be lifted," she said.

Consequently, among the 186 mining companies sampled by Mysteel, those in North China produced a total of 142,100 t/d of iron ore concentrates during the latest survey period, down 11,000 t/d on fortnight, data showed.

On the other hand, iron ore consumption in China has continued to rise as steelmakers have ratchetted up production. Over September 16-22, the average blast furnace capacity utilization rate of the 247 steelmakers tracked by Mysteel rose for an eighth consecutive week to hit a three-month high of 89.1%. These 247 mills' daily hot metal output had also increased to 2.4 million t/d over the same period.

"Steel mills hosting blast furnaces were actively resuming production as they saw the demand from end-users recover this week," a market analyst based in Shanghai said, adding that in response, the steelmakers increased procurement of iron ore.

As a result, iron ore concentrate stocks being held at the 186 Chinese mining companies dropped for the second period by another 364,500 tonnes on fortnight over September 9-22 to hit a two-month low of 3 million tonnes.

Written by Anthea Shi, shihui@mysteel.com

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