Chinese mills' imported iron ore use dips, stocks up

The average daily consumption of imported iron ore sintering fines at 64 Chinese steelmakers under Mysteel's survey eased to 531,400 tonnes/day over September 22-28, retreating by 31,400 t/d or 5.6% on week from three consecutive weeks of rises. Meanwhile, their stocks of sintering fines grew further over the period.

By region, steelmakers in North China's Hebei consumed less imported sintering fines, Mysteel's survey showed.

The city government of Tangshan in Hebei imposed temporary curbs on local mills' sintering machines over September 27-October 1 to improve air quality by cutting 30%-50% of mills' sintering capacity, Mysteel Global noted.

"The usage of sintering fines among local mills declined by a large degree, though their blast furnace operations would be affected a little should the curbs just are to be observed till October 1," said a Shanghai-based market watcher.

Meanwhile, some mills already slowed down their pace of production resumption as they had been losing money in selling finished steel, a ferrous analyst in Shanghai explained mills' lower consumption of iron ore.

For example, integrated mills in Tangshan still suffered an average loss of Yuan 47/tonne ($6.5/t) on billet sales as of September 28, after the on-week recovery of Yuan 84/t, according to Mysteel's tracking.

In fact, daily hot metal output among 247 Chinese mills under Mysteel's survey had increased to 2.4 million t/d on average over September 15-21, hitting the highest level since mid-June after the eighth on-week gain by another 20,200 t/d. The output was also 9% higher on year, Mysteel's survey showed.

On the other hand, inventories of imported iron ore sintering fines stockpiled at 64 surveyed mills had risen for the second week by another 8% on week to 13.8 million tonnes as of September 28.

At the present rate of consumption, the existing tonnage should be enough to keep these mills operating for around 25 days, four days longer than the previous survey.

The rise in steelmakers' ore stocks was because of their reduced consumption and their recent active restocking ahead of China's National Day holiday from October 1-7, according to the analyst.

Written by Lea Li, liye@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com

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