SHANGHAI, Jul 12 (SMM) – China produced 119 million mt of iron ore concentrate in the first half of 2019, up 4.3 million mt, or 3.8% year on year, showed an SMM survey, bolstered by higher margins that drove miners to step up operations.
Profit margins across Chinese iron ore mines averaged 170-200 yuan/mt in January-June, with a high of 400 yuan/mt for low-cost mines, SMM calculations showed.
Prices of domestic iron ore followed seaborne materials higher, as Brazil’s Vale dam accident in January and cyclones in Australia in March led to a slump in supply.
SMM’s price index MMi for iron ore with Fe 62% climbed from $73.04/mt at the start of the year to $126.12/mt as of Friday July 12, with an increase of some 73%.
Meanwhile, prices of domestic materials expanded 34%, rising from 623 yuan/mt to 834 yuan/mt, showed SMM assessments.
Environmental pressure, inspections and the expiration of mining permits limited growth in domestic iron ore output.
Improved demand sharply lowered iron ore stocks across Chinese miners in the first six months of the year.
China’s output of iron ore concentrate is expected to extend its increase in the remainder of the year, in anticipation of a further recovery across mines.
SMM expects output in July-December to expand 6-7 million from the same period last year, and output for the full year to stand at 250-252 million mt.