China’s steelmakers are consuming more iron ore pellets in their blast furnace production these days, new data suggests. As of October 21, the 64 mills surveyed regularly by Mysteel had raised the proportion of pellets in their furnace feedstocks by 0.08 percentage point on fortnight to reach 16.46% – the second highest since the survey was inaugurated in July 2014 and only narrowly lower than the 16.67% record the mills observed at the end of last December.
Consequently, over the two weeks to October 21 the average ratio of lumps in the mills’ melts declined by 0.1 percentage point to 12.51% while the steelmakers’ use of sintered ore in their blast furnaces remained stable at the historical high of 71.03% – up by a mere 0.01 percentage point over the prior survey period, the findings showed.
“Some steel mills in (North China’s) Tangshan have been consuming more iron ore pellets recently, especially imported pellets, because the prices are more affordable, considering the overall raw materials cost,” a Tangshan-based market source close to local steel mills remarked.
According to him, prices of imported iron ore fines are still rather expensive, and that’s one of the reasons why steel mills have slashed their sintered ore consumption. Over the past couple of weeks, the cost efficiency of using lump has declined compared with using pellets, now that coke prices have surged to a rather high level.
Currently, prices for imported iron ore pellet are still attractive to some steel mills, even though pellet prices have recovered a little. By October 22, the price of 64.5% Indian pellet at Rizhao port was Yuan 1,019/wmt ($152.5/wmt) FOT and including 13% VAT, according to Mysteel’s assessment.
By the same day, Mysteel’s price of 62% pellet in Qian’an Hebei was at Yuan 1,135/tonne EXW and including 13% VAT. On Thursday, Mysteel’s PORTDEX 62% Fe Australian Fines price index still remained at Yuan 880/wmt FOT Qingdao and including VAT.
Despite the fluctuation in iron ore prices over the past month, Chinese domestic prices for coke have strengthened over the period, due largely to the limited supply and rather robust demand. By October 22, according to Mysteel’s assessment, China’s national coke pricing index had risen by Yuan 127.2/t on month to reach Yuan 2,011.4/t including 13% VAT, a new high since late August 2019.
Written by Victoria Zou, firstname.lastname@example.org; Edited by Russ McCulloch, email@example.com