As of December 22, iron ore inventory across 35 ports tracked by SMM totalled 115.62 million mt, up 2.22 million mt WoW. Daily average deliveries from the ports increased by 460,000 mt WoW to 2.466 million mt.
Port congestion pressure eased this week, but it was still serious in some ports. In addition, cold wave weather slowed down unloading efficiency of some steel mills in north China, hobbling iron ore transportation to a certain extent. In addition, weak profits and high iron ore price led to soft buying appetites of steel mills, largely decreasing shipments from the ports. Therefore, iron ore inventory at the ports piled up.
Looking ahead to next week, according to SMM's tracking of operating rate of BF, with year-end maintenance of BF steel mills seasonally increasing, the daily average pig iron output may fall sharply, probably weakening iron ore concentrate demand. In addition, steel mills will aim to purchase iron ore on a need-to basis amid sustained profit weakness, and their replenishing demand will be little ahead of the Chinese New Year's Day. It is expected that shipments from the ports will be difficult to increase next week, and ore inventory at the ports may still build up.
