Rainy season to affect operation at Chinese iron ore mines in May

It is expected that in May, the average capacity utilisation rate of domestic mines may still have room for improvement mainly due to two factors.

1) There is still room for a rebound in ore prices in May. According to SMM survey, most of the mines can eke out profits of above 100 yuan/mt and are enthusiastic in production; 2) The mines that resumed production after environmental protection and safety inspections have actively stepped up production to reduce cost pressures, especially those that just resumed production in April.

In addition, mines in some areas that were suspended due to production safety inspections are still expected to resume production in May. However, due to the impact of the rainy season in some areas in May, such as in Anhui, Guangdong, Fujian and Hubei, the improvement in the average capacity utilisation rate may be limited.

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