China mines' iron ore output rises, stocks fall

Domestic production of iron ore concentrates among the 186 Chinese mining enterprises under Mysteel's coverage edged up by 28,000 tonnes/day on fortnight to average 429,500 t/d over January 27-February 9, after falling for the prior four consecutive periods.
Accordingly, the concentrating capacity utilization rate among the sampled miners increased by 3.6 percentage points during the same period to reach 55%, the data showed.

After their week-long holiday breaks for late January's Chinese New Year (CNY) holiday, domestic miners and concentrating plants gradually resumed operations during the past two weeks, leading to an increase in domestic iron ore output, Mysteel Global noted.

Meanwhile, on February 2 two mining enterprises in Handan in North China's Hebei finally obtained permission from local authorities to restart operations, according to a market watcher based in Tangshan. Other miners in the city will gradually resume production later, and this will ease the tightness of local iron ore concentrates supply, she noted.

Mining operations in Handan had been suspended entirely since October last year, a suspension that coincided with the staging of the 20th National Congress of the Communist Party of China held during October 16-22 in Beijing. Local authorities in Handan did not allow production after the 20th congress because air quality over the city worsened. The government is also hoping that small sized miners will be merged into larger enterprises whose mine safety procedures are more advanced, as Mysteel Global reported.

Consequently, during the latest survey period, the average concentrating capacity utilization rate among the 54 miners in North China under Mysteel's tracking had increased by 4.2 percentage points to 40.8%, with their daily concerns production rising by 10,700 t/d on fortnight to 104,300 t/d.

Regarding iron ore demand, as domestic blast-furnace steelmakers continued to maintain normal production during the past two weeks, they increased their iron ore procurement to restock feed materials when traders returned to the market following the CNY holiday, according to the Tangshan-based market watcher.

In the meantime, some steelmakers in North, South, and Northeast China put more BFs into operation after completing maintenance work, another factor leading to the rise in ore consumption, Mysteel's survey showed.

Consequently, despite the increase in output, iron ore stocks among the 186 sampled miners under Mysteel's tracking decreased for the fourth period, falling by another 22,400 tonnes on fortnight to 2.67 million tonnes as of February 9.

Written by Anthea Shi, shihui@mysteel.com

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