Growing Overseas Shipments Caused Iron Ore Inventories Across 35 Chinese Ports To Pile Up Sharply, High Pig Iron Output Will Limit Drop In Cargo Pick-Up From Ports

As of October 27, iron ore inventories across 35 ports tracked by SMM totalled 108.43 million mt, up 3.43 million mt WoW but down 20.3 million mt YoY. The daily average pick-ups from the 35 ports were down 174,000 mt WoW at 2.83 million mt in the week ending October 27. In spite of high pig iron output, iron ore demand appeared sluggish. Moreover, there were tighter environmental protection-related production restrictions. Therefore, enthusiasm on purchases from ports weakened. Meanwhile, China's iron ore arrivals at ports increased by 13.4% in the week ending October 27, leading to a heavy buildup of inventory at ports. Overseas shipments will be ample in the fourth quarter, but South China ports will be occasionally disturbed by typhoons. Muted terminal demand will make a dent in buying appetites again. According to maintenance data collected by SMM, BF maintenance-induced pig iron production losses will decrease next week. In addition, raw material inventory at steel mills are low. Under such circumstance, a drop in cargo pick-ups from the ports will be limited. Inventories at the 35 ports may continue to accumulate in the future.