Iron ore inventory at 35 Chinese ports may continue to pile up

As to December 8, iron ore inventories across 35 ports tracked by SMM totalled 115.1 million mt, up 3.02 million mt WoW but down 15.54 million mt YoY. The daily average shipments from the 35 ports decreased by 76,000 mt WoW to 2.869 million mt last week. Iron ore arriving at Chinese ports increased by 3% last week. According to the BF steel mills tracked by SMM, environmental protection-related production limits and annual maintenance plans slightly lowered the operating rate and capacity utilisation rate of sample steel mills. Therefore, buying appetites of steel mills ebbed. In addition, steel mills with weak speculative demand had low acceptance of high-priced iron ore prices. They still had low inventory strategy, and may refill stocks. From the perspective of iron ore fundamentals, overseas mines will start to fulfill annual production target at the end of the year, while the daily average pig iron output of steel mills is unlikely to rebound significantly. It is expected that iron ore inventory at the 35 ports will still pile up in the future.