SHANGHAI, Jan 17 (SMM) - Recently, government officials paid a visit to Dai county, which accounts for nearly 47% of Shanxi province’s iron ore capacity, to guide future production resumptions of local mines. The iron ore capacity in Shanxi currently stands at 32 million mt, SMM survey showed.
In the wake of water inrush accident at a mine in Hebei province in early September 2022 and collapse accident at one mine in Dai county in the same month, the county has halted explosives supply to local mines altogether, driving local iron ore supply to a halt.
However, following the visit, mines in Dai county will resume their production in February along with the recovery of explosives supply. This will ease iron ore supply tightness in Shanxi and the domestic market.
Mines across Shandong, Anhui and Zhangjiakou have shut down one after another for the upcoming Chinese New Year (CNY), while most dressing plants will remain in operation during the holiday. The current iron ore supply remains tight.
The demand for domestic iron ore has fallen as steel mills generally hold 15 days of raw material inventories.
Domestic iron ore prices have gone up since early November, buoyed by rising imported ore prices, tightening supply and steel mill stocking for upcoming CNY.
However, the prices are at risk of corrections after the CNY holiday due to eased supply tightness, limited restocking by steel mills, as well as tighter regulatory supervision following drastic price rise.