[SMM Survey] Environmental Protection-Driven Production Restrictions Intensify, Iron Ore Concentrates Production Declines

According to the SMM survey, the capacity utilisation rate of domestic iron ore mines was 55.3% last week, down 2.4% WoW; iron ore concentrates production was 738,000 mt, down 32,000 mt WoW; sales were 728,000 mt, down 42,000 mt WoW; and mine concentrates inventory was 250,000 mt, up 10,000 mt WoW.

Production: Last week, iron ore concentrates production saw a significant decline. Firstly, some large mines and beneficiation plants have completed their annual production targets, leading to reduced production enthusiasm, with some beneficiation plants undergoing short-term maintenance. Secondly, a mine in east China was affected by environmental protection and safety inspections, resulting in a production halt, significantly impacting local iron ore concentrates production. This week, previously halted mines have not resumed production, and most mines and beneficiation plants are producing as planned. Iron ore concentrates production is expected to remain stable.

Sales: Recently, steel mill profits remain under pressure, with raw materials being purchased as needed. The sentiment to stand firm on quotes among mines and beneficiation plants remains strong, leading to relatively sluggish market transactions. Some mines and beneficiation plants have seen a slight increase in inventory. This week, the impact of environmental protection-driven production restrictions in north China has intensified, weakening demand for iron ore concentrates and potentially exacerbating the sluggish market conditions.

Overall, the domestic iron ore concentrates market remains tight, providing some support for ore prices. On the demand side, steel mills' desire to bargain down prices remains strong, with most purchases being made as needed. Considering the upcoming important meetings, the market holds an optimistic outlook, which may drive up domestic iron ore concentrates prices.