More Chinese Iron Ore Mines Suspend Production on Sluggish Market

A recent Steelease survey found that some SME mines are suspending production in Hebei, Liaoning, Shandong and Sichuan provinces. Operating rates at mines throughout Liaoning are down sharply, with the average rate at local private mines falling below 50%, down from April’s average of 69%.  

 

Mines in Xinjiang and Gansu provinces are suffering severe losses from sluggish prices, the survey also found. 

 

Ex-works price for concentrates in Gansu province is only 650 yuan ($105) per tonne (Fe 63%, dry basis, including tax), so small beneficiation plants lacking pelletizing or sintering equipment have been forced to close. 

 

In Xinjiang province, only mines in Fuyun county are able to remain profitable due to high ore quality and favorable transportation networks. Mines in other regions of Xinjiang were still in production, but at low operating rates. Production halts at SME steel mills in Xinjiang also reduced local demand for iron ore.