Domestic Iron Ore Concentrate Resources Remain Tight, Mine Inventories Continue to Decline in August

According to the SMM survey, domestic mine inventories of iron ore concentrates continued to decline in August. Nationwide, mine inventories were about 790,000 mt, down approximately 105,000 mt MoM. The days of inventories stood at 3.2 days, down 0.4 days MoM.

The main reasons for the decline include:
1) Although the overall production of iron ore concentrates slightly increased in August, domestic iron ore resources are still relatively tight. Some mines and beneficiation plants ceased production but still had some inventory from earlier periods, and for cash flow considerations, they might choose to sell part of their stock. In the southwest and Liaoning regions, the proportion of domestic iron ore concentrates used by local steel mills is relatively high. Due to heavy rains and other factors, overall production in August was low, and the destocking at local mines was relatively noticeable.

Entering September, the capacity utilisation rate of domestic mines and beneficiation plants may slightly increase. However, considering that the inventories of domestic iron ore concentrates at steel mills are currently at a low level, and with the Mid-Autumn Festival and National Day holidays approaching, the demand for restocking at steel mills may drive further inventory reduction of domestic iron ore concentrates.