In August this year, China’s iron ore production amounted to 74.296 million mt, up 0.4 percent month on month, while rising by 6.5 percent year on year, with this year-on-year growth 3.4 percentage points lower than that recorded in July. Though local miners increased production in the first half of the year amid the uptrend in the international market due to supply disruptions from Brazil and Australia, the situation has started to change.
The usage of local iron ore in Chinese steel production increased to 20-22 percent in the first half of the year, according to SteelOrbis’ calculations. However, miners are unlikely to push this rate up much further in the second half, taking into account the bearish sentiments prevailing in the market. The import iron ore price decreased to as much as $81.25/mt CFR in late August, while some local Chinese miners can have sustainable production if import prices are at $90/mt CFR and above. Though prices have been adjusted up in September and domestic iron ore producers will try to keep a sustainable output level, the situation may worsen later this year, sources say.
In the January-August period this year, China's iron ore production amounted to 558.331 million mt, up 6.1 percent year on year, with the growth down 0.3 percentage points from that recorded in the January-July period, as announced by China’s National Bureau of Statistics (NBS).