China's ROM iron ore output slumps 27% m-o-m in July: NBS

Mysteel Global: China produced 70.2 million tonnes (mnt) of run-of-mine (ROM) iron ore in July, lower by a hefty 27.3% from June and ending two months of continuous increases, according to new data released by the country's National Bureau of Statistics (NBS). The total was also 18.1% below the year earlier level.

Despite the declines, the July result nonetheless took China's ROM iron ore output total during January-July to 652.6 mnt higher by 7% compared with the first seven months of last year.

Last month's steep drop in ROM ore production was mainly attributed to mine-safety campaigns conducted by local authorities where strict inspections disrupted mining operations, a source said.

For this reason, large mines in North China's Hebei had to cut or halt their production, as did some mines in Northeast China's Liaoning. As a result, ROM ore output in Hebei slumped by 46% on month in July while that in Liaoning also recorded a 7% on-month decrease, the NBS data showed.

Meanwhile, iron ore production in North China's Shanxi and Southwest China's Sichuan slipped by 9% and 11% on month to 3 mnt and 7.4 mnt respectively last month.

Other factors besides the safety checks had also contributed to the output declines, the source said, including routine maintenance stoppages at some mines, unfavourable mining conditions caused by heavy rains, and reductions in ore quality leading to lower grade ores being extracted.

The reduction in ROM ore production in July also reflected the fall in iron ore concentrates output last month among the 433 domestic mining companies under Mysteel's tracking. These miners produced just 21.9 mnt of iron ore concentrates over the past month, down by 11% on month and recording the lowest since December 2022.

On the other hand, Chinese steelmakers maintained stable purchases of domestic iron ore concentrates throughout most of July as they kept their hot metal output at a relatively high level. It was not until month-end that mills decided to cut their upstream production in response to the losses they were suffering on finished steel sales, Mysteel Global noted.

Consequently, by 25 July, iron ore concentrate stocks held by the 186 mining companies under Mysteel's other survey had shrunk by another 37.5% on month to reach a record low of 597,500 tonnes (t).

Regarding price, the offering price of 66% Fe grade iron ore concentrates in Tangshan in North China's Hebei was assessed by Mysteel at yuan 1,046/dmt ($146.4/dmt) exw and including the 13% VAT on 31 July, making for a gain of yuan 20/dmt from a month earlier.

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