China’s iron ore production is forecast to decline by 3% to 78.2 Mt in 2020 due to the impact of COVID-19. Between January and February, the operating rates at private iron ore mines declined from 34.9% to 29.6% and overall, China’s iron ore production declined by 4.6% y/y, according to GlobalData.
Several mines and plants had to temporarily cease the production activities. The deliveries and shipments were either delayed or rescheduled, and there was a shortage of workers, who could not return to mine sites owing to the prolonged Lunar new year holidays, followed by the transportation issues due to lockdown.
Vinneth Bajaj, Senior Mining Analyst at GlobalData, said: “As a result of the slowdown in the domestic production, iron ore imports grew by 1.5% y/y in January and February 2020 to reach 176.8 million t. However, purchases accumulated at ports due to transportation challenges, owing to the lockdown and inventory at ports had reached a 3 month high of 131.1 million t by 7 February 2020.”
GlobalData forecasts the iron ore production in China to grow at a compound annual growth rate (CAGR) of 1.1% between 2020 and 2024 to reach 81.6 million t.
Bajaj concluded: “The growth will be relatively flat due to the elimination of inefficient steel capacity, as part of the 3 year ‘Blue Sky’ environmental initiative, which runs from 2018 - 2020. This initiative is driving domestic steelmakers to utilise high-grade iron ore (Fe 58 - 62%), which principally originates from Australia and Brazil.
Read the article online at: https://www.globalminingreview.com/finance-business/14042020/globaldata-covid-19s-initial-impact-to-reduce-chinas-iron-ore-output-by-3-in-2020/