Output Cuts By Steel Mills Fell Short Of Expectations, Iron Ore Inventories Across 35 Chinese Ports Declined From Pre-Holiday Levels

SHANGHAI, May 15 (SMM) - SMM statistics showed that iron ore inventories across the 35 ports in China totalled 122.43 million mt as of May 12, a drop of 2.73 million mt from levels seen before the Labour Day holiday and 8.42 million mt from a year ago. The daily average shipments from the 35 ports decreased 288,000 mt from pre-holiday levels to 2.86 million mt last week. Transactions almost stagnated during the Labour Day holiday. Port arrivals increased slightly last week. Shipments from Australia and Brazil were relatively high. Output cuts by steel mills were smaller than expected. Some steel mills planned to resume production.

Pig iron production will hardly fall, which will support iron ore demand. Lower ore prices may boost speculative activity. As such, port inventory is expected to fall further this week.