China's ROM iron ore output rises 4% y-o-y in Jan-Aug'24

Mysteel Global: China produced a total of 696.5 million tonnes (mnt) of run-of-mine (ROM) iron ore over January-August 2024, 4.1% higher than during the first eight months of last year, according to new data released by the country's National Bureau of Statistics (NBS). The y-o-y increase narrowed from the 7% rise recorded for January-July 2024, Mysteel Global notes.

In August alone, China's ROM iron ore output rebounded by 4.9% m-o-m to reach 73.6 million tonnes, after a steep m-o-m decline of 26.4% in July, according to the NBS data, though the volume was still 16% lower y-o-y.

The recovery in ROM ore production last month was due to the gradual resumption of production at mines in certain regions, following mine-safety campaigns conducted by local authorities, a source said.

For example, ROM ore output in North China's Hebei, the country's top ore-producing province, grew 12% m-o-m to reach 29.5 mnt in August, and that in Southwest China's Sichuan rose by 10% m-o-m to 8.1 mnt.

The uptick in operations at domestic miners was also evident from Mysteel's tracking of 433 Chinese mining companies, which showed that their overall output of iron ore concentrates last month had advanced by 1.6% m-o-m to reach 22.2 mnt.

In contrast to the improved iron ore output at miners, demand for the feedstock among domestic steelmakers was subdued in August, as mills generally reduced their hot metal production in response to severe losses on finished steel sales.

At one point last month, the profitability ratio of the 247 Chinese steel producers under Mysteel's monitoring fell to a record low of just 1.3% on August 22, indicating that, on that day, 98.7% of the surveyed mills were losing money.

Consequently, mills became aggressive in pushing down domestic iron ore prices to reduce their costs. For example, the offer prices of 66% Fe grade iron ore concentrates in Tangshan in North China's Hebei weakened to RMB 998/dry metric tonne (dmt) ($141.3/dmt) exw, inclusive of 13% VAT, by 30 August, falling by RMB 48/dmt from end-July, Mysteel's assessment showed.

However, the lower prices of feed materials appeared to be of little avail in boosting sales, and concentrate stocks at miners still accumulated. During 9-22 August, the total stocks of concentrates held by the 186 mining companies surveyed by Mysteel had mounted to 742,600 tonnes (t), up by 24.3% m-o-m.

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