China's Crude Iron Ore Production Plunge 40% in CY18 Amid Stringent Environmental Concerns

According to National Bureau of Statistics, China - world's largest consumer and importer of iron ore has witnessed steep drop in crude iron ore production in CY'18. The production in CY18 was recorded at 793.05 MnT , down 40% against 1,321.6 MnT in CY17.

Reasons behind sharp fall in crude iron ore production -

1. Revoking of iron ore mining licenses on pollution related issues - The drop is attributed to strict environmental laws for dust control operations resulting in revoking iron ore licenses. Due to imposed strict govt. regulation to control smog related problems. China started revoking a decent number of iron ore mines licenses in Oct'17.

2. Miners going for high quality development - Miners were forced to upgrade the mining process to match the guidelines given by the China govt. The iron ore mining licenses of about one third of country's mines were cancelled effecting about 1000 mines. Also, the temporary suspensions of mines in Mar'18 due to political events also added to production drop.

In Dec'18, iron ore production stood at 68.42 MnT down slightly as against Nov'18 at 68.89 MnT . On yearly basis, the production fell 37% in Dec'18 as compared to Dec'17 production at 109.22 MnT.

Iron ore imports to China fell 1% in CY18

Iron ore imports to China was recorded at 1,064.3 MnT in CY18. The imports have dropped marginally by 1% as against CY17 imports at 1,075 MnT.

Yearly average global iron ore fines (Fe 62%) prices dropped slightly to USD 70/MT, CFR China in CY18 compared to USD 71/MT, CFR China in CY17. On monthly basis, the average price dropped to USD 69/MT in Dec'18, CFR China as against being USD 73/MT, CFR China a month ago.