China’s Output of Pig Iron, Iron Ore Down in November

SHANGHAI, Dec. 12 (SMM) -- According to the latest data from China Customs, China’s pig iron output was 45.89 million mt during November, down 10% MoM, and down 6.19 million mt compared with September. Operating rates at steel mills fell to a record low of 74.5% in November, since steel mills suspended production for maintenance due to losses. However, most steel mills who shut down production have resumed operations as iron ore prices fell significantly, so China’s pig iron output is expected to grow slightly in December.

China’s iron ore output in November also declined. Run-of-mine output was 126 million mt during November, down 4.6% or 6.04 million mt from October, with the output already falling to a low in 2H 2011. Lower run-of-mine output in November was within expectations, since many small and medium mines in North China have been closed due to higher costs as the weather turned colder. For example, many small mines in Baotou, Inner Mongolia have shut down production in late November. In addition, many mines had to temporarily stop mining operations amid heavy snowfalls, and would remain closed until after the removal of snow. Steelease believes run-of-mine output in December will decline further. In addition to above-mentioned two reasons, local governments will limit or even suspend the supply of explosives before important holidays like New Year's Day and the Chinese New Year holiday for safety concerns, which will exert a great impact on production at mines.