Iron Ore Inventories across 10 Major Chinese Ports Held Stable, Pellets Saw Most Significant Inventory Accumulation

SMM survey showed that last week, the inventory of imported iron ore across ten major ports in China totalled 89.67 million mt. According to SMM data, 198 ships arrived at domestic ports from April 1-7. During this period, shipments from Australia fell from 14.66 million mt to 14.45 million mt, while those from Brazil decreased from 2.42 million mt to 1.66 million mt. Overseas shipments fell slightly last week. Arriving shipments at major domestic ports dropped 22.09%, while those of fines and pellets increased.

Concentrates inventories at the ten ports dropped 1.7% to 6.64 million mt, and lumped inventories declined 4.4% to 13.27 million mt. The inventories of fines and pellets climbed 0.4% and 7% respectively to 62.67 million mt and 7.09 million mt. At present, the output of pig iron at steel mills is high, which supports the demand to a certain extent. Last week, the average operating rate of domestic pelletising mills rose slightly. Deliveries of concentrates from ports were relatively high.

The inventory of imported pellet accumulated significantly. Lower profits at steel mills mainly using blast furnaces depressed the demand for high-priced pellets. As steel mills are under greater pressure on cash flow, their ability to purchase pricy varieties has weakened. However, as most steel mills will restock ahead of the Labour Day holidays, inventories at the ten ports will continue to decline this week.