Iron Ore Output at One Chinese Company Skyrocketed in April

In April, the capacity utilisation rates and operating rates at mines in Hubei were similar to those in Henan. A private mining company produced 8,000 mt of concentrates in April, which was a 300% increase compared with 2,000 mt in March, but still below its normal level. The mining company also said that due to the recent decline in ore prices, the ROM supply was hampered, and concentrate output is unlikely to increase in the short term. In addition, it had no concentrates inventory by offering low selling prices amid robust demand.

Output at another private mining company dropped to 45,000 mt in April, mainly due to the decline in the quality of ROM. The company’s technical transformation is expected to end in June, and its monthly concentrates output is expected to increase to 60,000 mt thereafter. In April, the prices of concentrates in Hubei dropped by 100 yuan/mt. Nonetheless, the mine reported brisk sales thanks to a low selling price for Fe 58% concentrates, leaving not inventories on hand. At the same time, it made a profit of about 100 yuan/mt.

A third private mining company which produced 10,000 mt of concentrates in April lowered prices by 100 yuan/mt, boosting sales. Therefore, it had no concentrates inventory left as well. However, since the company’s new project will not be completed until end-May, its concentrate output will not grow until June. The mining company also mentioned that the environmental protection-related inspections in Hubei put the small mines that do not meet the requirements at the risk of being shut down. This, together with the recent rapid price decline, will prevent the local capacity utilisation rates from rising rapidly any time soon.

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