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China: Iron ore demand and supply to grow in CY'21 - Mysteel


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8 Jan 2021, 10:22 IST
China: Iron ore demand and supply to grow in CY'21 - Mysteel

China's iron ore demand and supply may both grow this year and the year's average iron ore price might ebb from that for 2020, though it is too early to be definite about the price movement, Mysteel shared in its iron ore annual report.

For 2021, China's iron ore supply including the tonnage from the domestic and overseas mines may total 1.46 billion tonnes, or up 33 million tonnes on year with 10 million tonnes from China's domestic miners, while the actual demand is estimated at 1.45 billion tonnes, or having a surplus of 6.7 million tonnes against a deficit of 11.3 million tonnes for 2020.

Globally including China, the iron ore supply may increase by 96.3 million tonnes, though the demand for iron ore from elsewhere in the world other than China may recover too in 2021 should the pandemic be effectively under the control, Mysteel added.

For 2021, China's blast-furnace steel mills are expected to add on a total of 35.5 million tonnes/year new ironmaking capacity, though the actual pig iron output may only grow 19.3 million tonnes, or equivalent to about 30 million tonnes of iron ore consumption.

Mysteel's chief analyst Wang Jianhua expected China's steel output to grow marginally to 1.08 billion tonnes in 2021 from the projected 1.05 billion tonnes for 2020, though the country's Ministry of Industry and Information Technology reiterated on a few occasions that China's steel output would probably decline from 2020.

Whichever the case, with a more balanced iron ore fundamentals and a possible modest surplus, the iron ore price may show some softening and the year's low may emerge in the second or third quarter of 2021, Mysteel predicted.

For 2020, Mysteel's SEADEX 62% Fe Australian Fines averaged $108.5/dmt CFR Qingdao, up $15.3/dmt or 16.4% on year, and Mysteel's PORTDEX 62% Fe Australian Fines averaged Yuan 811.6/wmt, up by a similar degree of 103/wmt or 14.5% on year, with the most substantial surge in November-December.

As of December 21, Mysteel's SEADEX 62% Fe Australian Fines touched its new high since mid-September 2011, hitting $176.05/dmt CFR Qingdao, or up $82.75/dmt or 88.7% from January 2, and Mysteel's PORTDEX 62% Fe Australian Fines also touched its highest since the commencement of the assessment in April 2013, reaching Yuan 1,188/wmt FOT Qingdao and including 13% VAT.

China's steel consumption revived sharply from all the major end-users in China including automaking starting May-June had supported high domestic steel output and iron ore demand until the end of last year, and the blast capacity utilization rate among China's 247 steel mills under Mysteel's weekly survey, thus, had been above 90% since late May until the yearend.

The utilization rate once touched 95.16% as of August 13, a high in record since Mysteel enlarged the samples in January 2019 or up 7.03 percentage points on year, and these mills produced 875 million tonnes of pig iron, or 44.4 million tonnes or 5% higher on year.

Written by Victoria Zou, zyongjia@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.

Photo: Shipping Herald


8 Jan 2021, 10:22 IST



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