WEEKLY: China mills' imported iron ore use, stocks both rise
More steelmakers across the country have brought blast furnaces back online this month after completing maintenance stoppages, as reported. Consequently, Mysteel's latest survey among the 247 Chinese blast furnace steelmakers it tracks showed that their daily hot metal output climbed further to average 2.48 million t/d during September 1-7, another 0.5% higher on week.
In parallel, steelmakers procured more iron ore during the survey week to meet their higher consumption of the raw material, as inventories data show. Total stocks of imported iron ore sintering fines held at the same 64 mills had increased by 9.1% on week to reach 10.5 million tonnes as of September 13, a new high since late April, Mysteel's survey found.
Furthermore, most of the sampled mills will likely continue this active production pattern in the short term in the absence of official central-government requests to limit annual crude steel output, a Shanghai-based market insider predicted, adding that the mills' iron ore consumption will stay at high levels in turn.
Another reason for the rise in iron ore buying at ports is that the mills have started building up their in-house stocks of the feed to ensure smooth production during China's Mid-Autumn Festival and National Day holidays spanning September 29-October 6, the source observed.
During the upcoming long break, steel mills will not be able to replenish iron ore stocks at their plants as traders and logistics firms will take leave, Mysteel Global notes.
Boosted by market expectations of more pre-holiday restocking activities in coming weeks, Mysteel PORTDEX 62% Australian Fines in Qingdao strengthened this week, rising by Yuan 15/wmt ($2.1/wmt) on week to hit a six-month high of Yuan 942/wmt FOT and including the 13% VAT on September 13.
As for the 64 steelmakers sampled by Mysteel, their existing iron ore stocks should be sufficient to keep them operating for 18 days at their current consumption rates, one day longer than the prior survey period.
Written by Lea Li, email@example.com
Edited by Russ McCulloch, firstname.lastname@example.org