Anniversary events seen impacting Hebei ore concs output

Hebei, China’s top iron ore-producing region, produced 32.4 million tonnes of concentrates over January-June, accounting for around 25% of the country’s total output, up 381,000 tonnes or 1.34% on year, according to Mysteel’s latest survey among 322 Chinese mining companies published last Friday.

Based on the first half result, an increase of as much as 1.5 million tonnes might have been possible for this year’s full-year performance. However, the survey respondents suggest that a rise of only 800,000 to 1.2 million tonnes for 2019 seems likely as they anticipate mining operations in the province will be hampered in the weeks prior to and after October 1 when China will celebrate the 70^th anniversary of the foundation of the People’s Republic.

Though events to mark the anniversary will be held nationwide, most will be concentrated in and around Beijing and normally on such important occasions, Chinese government authorities impose a temporary ban on the use of explosives by mining companies to reduce the risk of accidents that could distract government attention, Mysteel notes.

Hebei province borders Beijing on three sides and as the 70^th anniversary is especially auspicious industry watchers expect both the duration and the severity of the explosives ban on miners to be especially strict.

The usual practice is for the provincial government to issue the order to city governments and for city administrators to decide the severity and duration of the ban, Mysteel understands. An official with a Tangshan-based mining company in Hebei agreed that all miners in the province including those producing iron ore are braced for tough restrictions this year.

The Tangshan source had also heard that some miners in Chengde, another city of Hebei, had received information indicating that for them, the explosives ban would commence from September 15 and may last for the whole month until October 15, though no formal notice had been issued yet. He believed Tangshan’s miners will be informed by their local governments soon.

“We have heard about the notice and have started accumulating run-of-mine iron ore for when the ban takes effect, to reduce the impact on our concentrates production,” an official with Chengde-based miner said.

Chengde and Tangshan are the main iron ore concentrate production bases in Hebei, with the production of each accounting for about 45% and 34% of Hebei’s total, Mysteel’s survey showed.

The concentrates prices in Hebei has declined since the beginning of this month in line with the downward trend in prices of imported iron ore. As of August 20, the transaction price for 66% grade concentrates in Tangshan had dipped by Yuan 85/dmt ($12/t) or 8.9% from August 1 to Yuan 865/dmt EXW and including 13% VAT, according to Mysteel’s database.

Written by Zhiyao Li, lizy@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com