Tangshan's Steel Mills Start Restocking Iron Ore for Chinese New Year

Inventory build activity for imported iron ore among steel mills in Tangshan in North China's Hebei province to tide them firstly through New Year's Day and then for the upcoming Chinese New Year (CNY) holiday contributed to the total of imported sintering fines stocks among mills nationwide increasing again on week as of Dec 31, market sources said on Thursday.

As of the last working day of 2019, stocks of imported iron ore sintering fines at the 64 Chinese steel mills under Mysteel's survey rose by another 277,100 MT or 1.5% on week to 18.7 MnT, hitting at eleven-month high, Mysteel's survey showed.

This slight but steady increase was mainly attributed to Tangshan's steelmakers increasing their procurement late last week, preparing for the one-day holiday on New Year's Day, a market watcher in the city said.

Indeed, restocking activity among Tangshan's mills was slower and later than that of mills in other regions in China, as the distances from local ports to Tangshan plants are generally shorter, the market source explained. "Thus, steelmakers there were not in any hurry for replenishment even though other regions' mills had already started," he added.

Over Dec 12-25, stocks of imported fines in the yards of the city's 21 surveyed mills dipped by 18,400 MT or a tiny 0.6% over the two weeks to reach 3.05 MnT, which was the only decline in stocks among all five key steelmaking regions, Mysteel's database showed.

Moreover, the market insider disclosed that after New Year's Day on Wednesday, Tangshan's mills had started replenishing for CNY, which will see the stocks of imported sintering fines increase further.

An official with a Tangshan-based steel mill admitted that although their plant is close to ports, currently the works' procurement staff are actively restocking for CNY, as they are afraid that the ports might be asked by the local government to ban the use of trucks to transport iron ore because of air pollution issues.

If air quality over the city deteriorates, the Tangshan city government normally mandates that truck deliveries of all goods including iron ore from ports be halted, Mysteel Global notes.

Already, mills in Tangshan are under a new round of emergency production curbs begun on Jan 2 as part of the 'orange' alert for air pollution and which will remain in place at least until Jan 7, as reported. So far however, there has been no word from the government indicating use of trucks will be temporarily banned, as reported.

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