Iron ore port congestion in China to ease by end of Aug - CISA

The China Iron and Steel Association (CISA) expects the current iron ore discharging difficulties and congestion issues at Chinese ports to ease by mid- or late-August with the improving weather and the coronavirus spread being under control, the association shared in a WeChat post on August 11.

CISA has noted that recently, the number of iron ore carriers backed up at ports has continued to increase due to adverse weather conditions, constraints to control the COVID-19 spread and more ships arriving at ports at the same time. This has prevented ore from being unloaded in a timely manner and disrupted the flow of ore into the market, it explained.

Consequently, CISA reported these issues to China's Ministry of Transport (MOT), and according to the association, MOT has taken measures to help ease congestion.

"Recently, many ports have had confirmed COVID-19 cases on some ships among crew members from other countries. To prevent and control the pandemic spread, there have been more restrictions placed on related port operations," a Shanghai-based market watcher remarked.

An official with Qingdao port in East China's Shandong province confirmed that the measures ports had adopted to contain the virus are the chief cause of the carrier congestion at some ports. "Once vessels from specific countries - not only iron ore ships - arrive at port, all crew members should have compulsory COVID-19 tests, and though the getting test results takes less than one day, to some extent it still prolongs the time required for the whole unloading procedure," he explained.

"Besides, some vessels laden with imported coal have been stuck at many ports for a long time waiting for Customs clearance, and this is also worsening the hold-up for iron ore vessels," the Shanghai-based market watcher added. In a bid to keep the rise in coal imports in check, for several months the Chinese government has been slowing the process of clearing foreign coal through Customs, as Mysteel Global has reported.

Mysteel's surveys also show the trend in iron ore handling. Over July 27-August 2, 45 ports received around 25.28 million tonnes of iron ore deliveries, higher by 6.8% on week. Nevertheless, imported iron ore inventories at these ports reversed down on week after a six-week gain, dipping by 0.5% to around 113.5 million tonnes by August 6. Meanwhile, the number of iron ore vessels at these ports increased by nine on week to 168, or a rather high level.

The low availability of some mainstream iron ore brands at ports amid robust demand from domestic steel mills has provided steady support for iron ore prices in China's portside and seaborne markets over the past several weeks.

Since July Mysteel's PORTDEX 62% Fe Australian Fines has risen by 17.8% to reach Yuan 926/wmt FOT Qingdao and including the 13% VAT on August 11 to refresh its highest point since November 2013. On the same day, the SEADEX 62% Australian Fines price also rose to $120.05/dmt CFR Qingdao

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