WEEKLY: China mills' imported iron ore stocks hit 10-m high

Mysteel Global: Inventories of imported iron ore sintering fines held by the 64 Chinese steelmakers regularly sampled by Mysteel increased for the third straight week by another 282,200 tonnes or 2.3% w-o-w over 19-25 December, touching a 10-month high of 12.6 million tonnes, the latest survey results showed.

Behind the continuous rises in ore stocks was primarily mills' slower consumption of their in-plant feedstocks when their restocking of iron ore remained active.

Daily consumption of imported iron ore sintering fines at these 64 Chinese steelmakers fell to 564,700 tonnes/day on average over the latest survey period, marking the fourth weekly decline of 15,900 tonnes or 2.7%, according to Mysteel's monitoring.

The lower consumption of sintering fines mainly reflected the increased maintenance work at blast furnaces (BF) among steelmakers, a Shanghai-based iron ore analyst said. For example, the average capacity utilisation rate of the 247 integrated steelmakers nationwide under Mysteel's tracking dropped by 1.15 percentage points w-o-w over 13-19 December, to reach 86.13%.

Steel mills usually idle their BFs for annual overhauls towards the end of the year when downstream steel demand is sluggish, Mysteel Global notes.

In contrast to their production reduction, most mills still purchased iron ore in large quantities with the aim to accumulate sufficient steelmaking materials in case transportation is disrupted during the snowy winter, market sources said.

The traded volume of imported iron ore in the portside market averaged 1.04 million t/d over the latest survey period, rising by 2.2% compared with the prior week's average, according to Mysteel's daily tracking.

Eventually, the inventories held by the 64 sampled mills should be sufficient for 22 days of use at their current consumption rate, 1 day longer than the prior survey period, according to Mysteel's assessment.

Regarding imported iron ore prices, they remain largely depressed due to the winter lull of steel consumption. Mysteel SEADEX 62% Australian fines sat at $100.6/dmt CFR Qingdao on 25 December, losing a total of $2.4/dmt from the prior week.

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