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China mills’ iron ore stocks at 22-month low

Posted on 10 September 2021

Inventories of imported iron ore sintering fines stockpiled at the 64 Chinese blast-furnace steel mills sampled in Mysteel’s regular survey fell to a 22-month low of 14.65 million tonnes over August 26-September 8, down by another 604,300 tonnes or 4% on fortnight and marking the eighth weekly decline. The daily use of these fines among the sampled mills also dipped, the results show.

 

Over the survey period, the daily consumption of imported sintering fines among the surveyed steelmakers reversed down to 524,600 tonnes/day after the prior fortnight’s gain, easing by 20,600 t/d or 3.8% over the two weeks. Compared with the same period last year, average daily usage was lower by 93,500 t/d or 15.8%, the survey showed.

Consequently, over the August 26-September 8 period, the inventories of iron ore fines held by mills were still sufficient for 26 days’ use at their present daily consumption rate, unchanged from the level in the prior fortnight.

“In general over the past two weeks, the controls that many steelmakers have placed on their blast furnace production have intensified, especially in North China –for example, in Handan and Tangshan (in Hebei) – so it’s no surprise to see the decline in daily use of iron ore,” a Shanghai-based analyst commented.

“Also, for the foreseeable future any substantial easing of the curbs on steel production is unlikely, so for the time being, there is no need for mills to stock much additional iron ore,” he added.

At present, steel mills are rather cautious regarding their iron ore procurement, and in fact, some are re-selling surplus tonnage from their long-term deal supplies, Mysteel Global noted.

Shrinking demand for ore from domestic steelmakers has heavily dampened market sentiment and dragged ore prices down further, Mysteel Global also observed.

Though fluctuating over the prior two weeks, as of September 8 Mysteel SEADEX 62% Australian Fines, for example, had declined further to $132.25/dmt CFR Qingdao, or down $15.4/dmt on fortnight.

Source : Mysteel Global