China's Q1 iron ore output jumps 15% y-o-y

China's run-of-mine (ROM) iron ore output totalled 284.1 million tonnes in the first quarter of this year, registering a marked rise of 15.3% on year, according to the latest statistics from the country's National Bureau of Statistics (NBS).

For March alone, China produced 98.2 million tonnes of ROM iron ore, the highest monthly output since June 2022. The total was up by 14.5% on year and 12% higher than the average output of 87.9 million tonnes recorded during January-February, Mysteel Global calculated based on the NBS data.

Last month, domestic iron ore miners gradually resumed production as the disruptions to their operations caused by the Chinese New Year holiday break in February had subsided, a Shanghai-based analyst pointed out. "In particular, miners in Northeast and North China were active in lifting their production as the warming weather in spring was conducive for local mining operations," he added.

This explained the outstanding production performance of North China's Hebei and Northeast China's Liaoning provinces in March, Mysteel Global noted. The top two mining provinces in China produced 49.4 million tonnes and 17.9 million tonnes, respectively, of ROM iron ore in the month, higher by 3.4% and 38.2% from their monthly average output in the first two months of this year, according to the NBS data.

The spike in iron ore output nationwide last month was also mirrored in the increased output of iron ore concentrates from the 332 Chinese mining companies under Mysteel's tracking. Output of iron ore concs from these miners jumped by 14.9% from February to 23.5 million tonnes in March, sending their total output of these feeds in Q1 higher by 3.2% on year at 65.7 million tonnes, according to Mysteel's latest survey results.

However, the demand for iron ore from Chinese steelmakers was anaemic in March due to the absence of a strong recovery of steel demand in the end-user market after the holiday break, as reported.

The mills' muted demand for raw materials had caused inventories of iron ore concentrates among the 186 Chinese mining enterprises sampled in another Mysteel survey to mount steadily during March, with the stocks rising by 11.5% on month to reach 1.29 million tonnes as of March 22.

Meanwhile, the negative profit margins incurred by most steel mills last month had prompted them to strongly press the domestic suppliers of iron ore to reduce their offering prices, Mysteel Global noted.

As a result, by March 29 the offering price of 66% Fe grade domestic concentrates in Tangshan in Hebei province under Mysteel's assessment had slumped to Yuan 922/dmt ($127.4/dmt) EXW and including the 13% VAT, down by a hefty Yuan 212/dmt on month.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.