BI-WEEKLY: China mills' iron ore use at 7-mth low on curbs
The significant fall-off in steel mills' iron ore use was the result of the current harsh production curbs to reduce air pollution during the Winter Olympic Games being staged in and around Beijing over February 4-20, according to a Shanghai-based analyst.
Many steelmakers in Tangshan in North China's Hebei were ordered by the local government to scale down their production by limiting sintering machine and blast furnace operations during the Chinese New Year (CNY) holiday over January 31-February 6 - shortly after the prior emergency curb was lifted on January 30, as reported.
Then on February 8, some steel producers in Tangshan, Central China's Henan and East China's Shandong were informed to halt all of their sintering machines and to conduct maintenance works on some of their BFs amid the intensified production curbs until February 11, according to the analyst.
On the other hand, stocks of imported iron ore sintering fines at the 64 surveyed Chinese steelmakers decreased by 1.1 million tonnes or 6.3% in two weeks to 16.4 million tonnes as of February 9, Mysteel's survey showed. At the present rate of consumption, the existing tonnage should be enough to keep the mills operating for around 39 days, five days longer than two weeks before.
"Most steel producers opted to consume their in-plant iron ore stocks during the CNY holiday after they had built up sufficient inventories earlier," the analyst said, adding that most traders and logistics services were generally off over the holiday.
"Even after the long holiday break, iron ore demand among steel producers in North China who had been observing production curbs were still rather inactive in restocking," she pointed out, adding that part of the transportation by truck of heavy goods out of local ports was also banned.
Written by Lea Li, liye@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
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