Domestic iron ore concentrate supply was still tight, and inventories of imported concentrate and pellets at China’s ten major ports dropped significantly last week

According to the inventory data tracked by SMM, iron ore inventories across 10 major ports in China increased 1.7% WoW to 76.9 million mt last week. A total of 210 ships carrying iron ore bounded for China during October 7- October 13. Among them, Australia’s shipments to China increased from 13.33 million mt to 16.66 million mt, while shipments from Brazil also climbed from 2.37 million mt to 3.66 million mt. Arrivals of iron ore concentrate, pellets, and lumps all rose. However, due to the obvious decline in fines, the overall arrivals volume still declined. The blast furnace operating rate and capacity utilisation rate both declined. Cargo pick-up was not active, causing 10 major ports to accumulate last week.

The inventories of fines and lumps accumulated by 2.7% and 3.2% to 57.66 million mt and 10.99 million mt. Last week, affected by the requirements of the “Belt and Road Initiative” conference and the approaching heating season, environment-protection restrictions in Hebei region were tightened, cutting the production of sintering machines and diminishing demand for fines. Steel mill profits shrank severely, coke quotations remained firm, and lump premiums continued to rise in the early stage, resulting in a weakening willingness to purchase lumps. The inventories of concentrates and pellets fell 6.4% and 6.6% respectively on a weekly basis to 5.64 million mt and 2.61 million mt. At present, domestic iron ore concentrate was still in short supply, and steel mills tended to push down concentrate prices due to losses. As a result, the enthusiasm for domestic concentrate shipments weakened, and market was more willing to purchase port resources. In addition, due to concentrate supply and profit factors, the operating rate of domestic pellet plants rose last week, boosting demand for port pellets. In the follow-up, since the peak season almost ended, steel mill’s profits are hard to expand and demand for high-price products is average. Currently, environment-protection restrictions on production still exist, so demand for fines is expected to drop.