China increased iron ore production by 13.4% y/y in January-May

Chinese mining companies increased iron ore production by 13.4% in January-May 2024 compared to the same period in 2023, to 457.35 million tons. This is evidenced by data from the National Bureau of Statistics (NBS), SteelOrbis reports.

In May of this year, Chinese mining companies increased ore production by 9% compared to May 2023, and by 0.6% compared to the previous month – up to 88.48 million tons.

Iron ore prices fluctuated within a limited range in May. At the same time, in June, quotations were moving downward. The highest price level was recorded on May 22 at $122/t, and the lowest on May 15 at $114/t. Weak demand for steel during the traditional seasonal downturn in the industry will have a negative impact on prices in the short term.

Imports of iron ore by Chinese steelmakers in January-May 2024 increased by 7% compared to the same period in 2023 to 513.75 million tons. In May, imports increased by 6.1% y/y and 0.2% m/m – to 102 million tons.

This year’s increase in China’s iron ore imports is in stark contrast to the weakness in steel production and demand for steel products. Imports of this raw material have exceeded 100 million tons for the third month in a row.

At the same time, in January-May, Chinese steelmakers produced 438.61 million tons of steel, down 1.4% from the same period last year. Steel mills are suffering from low profitability, and their sentiment has not yet improved despite Beijing’s significant efforts to stimulate the housing sector. However, demand for steel and expectations in the industry may increase in the second half of the year.

The large volumes of iron ore imports were not used for steel production, but rather to restock. Their volumes in ports over the past 7 months have averaged 6.06 million tons.