Iron Ore Inventories Across 35 Chinese Ports To Accumulate In May
The iron ore inventories across 35 ports in China tracked by SMM totalled 125.16 million mt as of April 28, down 4.47% from March and 9.95 million mt YoY. The daily average shipments from the 35 ports increased 104,000 mt month-on-month to the highest in nearly six months at 3.15 million mt in April, driven by rigid demand and stocking before the Labour Day holiday. Weak end demand and poor profit margins of steel mills will prevent iron ore demand from improving significantly. Iron ore port arrivals declined in April. Pig iron output is likely to drop sharply as poor profit margins will drive more steel mills to put their blast furnaces under maintenance.
Steel mills will maintain low levels of raw material inventories to alleviate their cash flow pressure. Considering the gradual recovery of overseas shipments and the rapid decline in domestic pig iron production, iron ore inventories across the 35 Chinese ports may build up in May.