Demand for Lump Increased Amid Production Restrictions on Sintering Machines, Steel Mills Mainly Purchased On Demand against Poor Profit

SMM survey revealed that last week, the total inventory of imported iron ore across ten major ports in China grew 1.3% from the prior week to 86.20 million mt. According to SMM data, 176 ships arrived at domestic ports from June 3-9. During this period, shipments from Australia decreased from 14.33 million mt to 14.04 million mt, and those from Brazil grew from 3.47 million mt to 3.88 million mt. Only the arrivals of lump increased.

The inventories of the four major varieties all increased last week, and the inventory of concentrates at the ten ports accumulated 6.7% to 7.48 million mt. The average operating rate of domestic pelletising plants slid further last week, and the demand for concentrates weakened. The inventories of fines grew 0.7% to 61.43 million mt, while those of lump at the ten ports grew 0.6% to 6.83 million mt. Pellet inventories at the ten ports accumulated 0.6% to 6.83 million mt. As ore prices rose slightly last week, steel mills mainly purchased on demand.

Due to the shutdown of some sintering machines in Hebei driven by environmental protection factors since June 14, the demand for lump has increased. However, higher lump premiums resulted in a slight accumulation of lump last week. Due to environmental protection factors, the demand for expensive pellets has increased. But considering the poor profit of steel mills, the inventory of pellets also accumulated slightly. According to the blast furnace maintenance data collected by SMM, the output of pig iron at steel mills remained at a high levels. The overseas shipments in large volumes have not arrived. It is expected that the inventory at the ten major ports will begin to decline.