Iron ore inventory in Hebei accumulated in April, will Grow Further in May

In April, the inventory in Hebei accumulated. Domestic iron ore prices declined in the month and some steel mills planned to cut output amid market pessimism, limiting the purchases of concentrates. On the supply side, steel mills’ pushing for lower prices eroded the profit margins of mines, thus most of them refrained from selling. Meanwhile, concentrate output grew after production resumptions of some mines, but sales were sluggish.

In May, Hebei has issued policies for the reduction in crude steel production. The poor profit can also drive steel mills to cut output. The negative impact on demand combined with production resumption at mines will continue to grow iron ore inventories in May.