According to a new report issued by the China Iron and Steel Association (CISA), as of May 31 this year imported iron ore inventory at Chinese ports totaled 160 million mt, up 1.32 million mt or 0.83 percent month on month and rising by 14.35 percent year on year.
According to the CISA, as of May 31 the composite steel price index (CSPI) in China was up 1.29 percent compared to the end of April. Meanwhile, capacity utilization rates increased rapidly, resulting in rises in crude steel output. However, China has initiated strict environmental protection inspections since May, which will lower steel output in the future. Moreover, due to the approaching Shanghai Cooperation Organization Summit (SCO) 2018, environmental protection measures have been implemented which will also exert a negative impact on steel output and cause a slackening of demand for import iron ore.
In the May 1-20 period this year, the average aggregate daily crude steel output of large and medium-sized steel enterprises in China - all CISA members - totaled 1.9576 million mt, while the average aggregate daily crude steel output for all steelmakers in China amounted to 2.5706 million mt, up 0.55 percent compared to the average for April and constituting a historical record. Due to the anticipated decline in steel output, demand for import iron ore will be lower in the coming period. Import iron ore prices for China are unlikely to indicate significant rises in June, the CISA said.