China's iron ore miners less impacted by rains

Fortunately for China's iron ore miners, this year's wet season has so far caused minimal disruption to their operations, market sources noted on Thursday. The heavy rains that began last month and will continue throughout July have already deluged many parts of the country and led finished steel prices to soften but the iron ore miners are producing as normal, Mysteel Global has learned.

Ordinarily, China's iron ore miners are less affected by the rains than their coal-mining counterparts anyway, chiefly because the major ore-producing and consumption regions are in northern China, with the largest and second largest iron ore production bases located in North China's Hebei and Northeast China's Liaoning provinces respectively. On the other hand, the heavy rains mainly soak South and East China, Mysteel Global notes.

Earlier this month on July 1, the heavy rains prompted the country's National Coal Mine Safety Administration to issue an emergency notification, warning that the rains had lifted both the level of underground water in coal mines and rainwater runoff into the pits, and called for immediate nationwide action on flood preparedness to protect the lives of coal miners, as reported.

However, no such warning has been issued to the country's iron ore miners, Mysteel Global notes. Most iron ore miners nationwide are producing smoothly except that deliveries are being delayed a little by traffic because the trucks must drive slowly on rainy days, an official with a Shandong-based iron ore mining company said. Most iron ore mines are underground, he noted, which are less affected by rains compared with open-pit operations.

Moreover, even in East China, the miner said his company's mine sites are less affected by rain than other areas in the province such as Dezhou city, where a sudden storm on June 25 caused power blackouts at local two coal mines which trapped over 300 mine workers underground for as many as seven hours, as Mysteel Global reported.

Thus, the overall run-of-mine (ROM) iron ore and iron ore concentrates output are generally steady currently. In South China, though the ROM production from some open-pit mines has declined slightly because of the rains, demand from local steel mills has also ebbed because steel trading is also affected by the extensive rainfalls, a Shanghai-based market watcher said.

Steel demand and transportation are restricted by rains, especially along the Yangtze River basin, a major centre for steel consumption in China, Mysteel Global notes.

Mysteel's latest bi-weekly survey showed during June 12-24, daily concentrates output from 186 surveyed mining enterprises increased for a ninth survey period by another 3,700 t/d or 0.7% to 543,400 tonnes/day, refreshing the record high since January 2019 when Mysteel commenced the survey.

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