China Nov iron ore output down 7.5 pct on yr

2014-12-17

China’s iron ore output plunged 7.5 percent in November from a year ago to 128.18 million tonnes, data from the statistics bureau showed on Tuesday, largely as a result of mandatory industry closures in northern China during the month.

China ordered hundreds of steel mills and mining operations across northern China to suspend operations in early November in order to cut air pollution during the Asia-Pacific Economic Cooperation summit in Beijing.

China’s biggest steelmaking and iron ore producing province of Hebei, which was hit the hardest by the APEC measures, saw its iron ore output fall 17.6 percent compared to the same period last year, and 9.9 percent on the month.

China, as the world’s top steel producer, is the world’s top consumer of iron ore and accounts for 60 percent of global seaborne trade.

National iron ore production dropped 4.9 percent compared to October, and was also hurt by plunging prices, which have driven some high-cost producers out of the market.

Prices of the commodity have plunged around 50 percent this year as a result of weakening Chinese demand growth and a huge increase in supplies.

Big global miners have been counting on a big drop in Chinese production in order to support prices, but many local miners are owned by large state steelmakers and are not directly affected by price adjustments.

Total output over January to November reached 1.386 billion tonnes, up 4.8 percent compared to the same period of 2013. Imports rose 13.4 percent over the 11 months to 846 million tonnes.

China does not adjust its data to account for the iron content of its raw ores. According to estimates from global miner BHP Billiton , Chinese output this year is likely to stand at 240-250 million tonnes when adjusted to 62 percent grades, down from 340 million tonnes last year.

Source from : Reuters

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