Iron ore inventory across 35 ports may pile up amid possible pig iron output decline

As of December 15, iron ore inventory across 35 ports tracked by SMM totalled 112.4 million mt, down 1.71 million mt WoW. Daily average deliveries from the ports increased by 57,000 mt WoW to 2.926 million mt. According to SMM, as operating rate of BFs and pig iron output inched up, iron ore concentrate demand remained robust. In addition, given that rain and snow may hobble transportation, some steel mills rushed to purchase iron ore at ports. Therefore, iron ore shipments from the ports increased.

Looking at this week, as the third round of coke price hike and falling steel prices will make a big dent in profits, steel mills will aim to purchase raw materials on a need-to basis. Moreover, constant environmental protection-related production limits may shut BFs for maintenance more than expected. Under this circumstance, iron ore concentrate may diminish. In addition, frequent snowstorms and windy weather in north China may reduce efficiency of port dredging operations. In summary, iron ore inventory across 35 ports may pile up in the future.