SMM Survey: Domestic Iron Ore Mine Weekly Production and Sales

According to an SMM survey, the capacity utilisation rate of domestic iron ore mines was 59% last week, down 0.7% WoW; iron ore concentrates production was 787,000 mt, down 10,000 mt WoW; sales were 782,000 mt, down 25,000 mt WoW; and iron ore concentrates inventory was 250,000 mt, up 5,000 mt WoW.

Production: Last week, most mines and beneficiation plants in China operated normally. In east China, mines and beneficiation plants that had previously halted production showed no significant signs of resuming operations. Some mines and beneficiation plants experienced a slight decline in iron ore concentrates production due to raw ore supply issues. This week, production is expected to remain normal, with some mines and beneficiation plants indicating that they might ramp up production as year-end approaches, potentially leading to a slight increase in iron ore concentrates production.

Sales: Recently, steel mill profits have been compressed again, with some mills returning to losses. Raw material procurement is mainly on a restock-as-needed basis, and steel mills have a strong desire to bargain down prices. Mines and beneficiation plants currently have a strong sentiment to stand firm on quotes, and their willingness to sell is low if prices fall below their psychological expectations, resulting in a relatively quiet market. This week, pig iron production from blast furnaces is expected to rise slightly, which may drive up raw material demand and improve market transactions.

Overall, the domestic iron ore concentrates market remains tight, providing some support for iron ore prices. Considering that some steel mills have started to incur losses, there is a strong overall desire to bargain down raw material prices. Coupled with the recent volatile performance of iron ore futures, domestic iron ore concentrates prices are expected to fluctuate widely in the short term.