Inventories at Iron Ore Mines Grew In April Amid Weakening Demand From Steel Mills

According to SMM survey, in April, the inventory of iron ore concentrates at domestic mines increased from 2.34 million mt or 9.4 days to 2.57 million mt or 10.3 days. 1) In April, due to the poor downstream demand for steel products, some steel mills in Shanxi and other regions began to overhaul their blast furnaces, which affected some output of pig iron.

The domestic average daily pig iron production also began to decline slightly from mid-April, weakening iron ore demand from steel mills. 2) Due to the continuous reductions in domestic concentrate prices in April in some areas, some beneficiation plants held onto their cargoes, which also drove up the inventory. 3) In April, due to the increase in the output of large mines in some areas and the reduction of raw material inventory by steel mills, iron ore sales were subdued, growing inventory in these areas.

It is expected that domestic mines' concentrate inventory will still increase slightly in May, mainly due to expected output growth. Meanwhile, as most steel mills have kept raw material inventories low amid poor profit, the lack of purchases will also result in a growth in concentrate stocks at mines.

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