SMM estimates indicate a November 2023 domestic iron ore mine capacity utilization rate of 55.7%, down 0.7% MoM. Concentrate production in November was 20.546 million mt, down 954,000 mt MoM.
The drop in November's capacity utilization rate is primarily due to the following factors: 1.Winter brings extremely low temperatures to some regions. Mines in areas like Inner Mongolia and Jilin might halt operations due to insufficient heating measures. 2.Recent mining accidents and poor air quality during the heating season have led to frequent safety inspections and environmental production restrictions in regions like Shanxi, Hebei, and Sichuan, hampering mining production. 3. As the year-end nears, some regions like Shandong, Liaoning, and Jiangsu have already reached their annual production targets, having produced excess concentrates earlier. Consequently, these regions are scheduling maintenance at mining and beneficiation sites. 4. Explosives use restrictions continue to cause unstable ROM supplies in regions like parts of Hebei and Liaoning, subsequently hindering production at beneficiation plants.
The capacity utilization rate may slightly decrease in December due to the following reasons: 1. Environmental restrictions could tighten. Reports suggest that local environmental protection teams in Shandong will stop mine operations for dust pollution remediation. 2. As the year-end nears, potential maintenance at mining and beneficiation sites could decrease concentrates production. 3. Steel plants have mostly finished winter storage of domestic concentrates. Winter transportation impacts and lower efficiency of mining and beneficiation could risk lowering the capacity utilization rate.
