Chinese domestic iron ore production

Chinese domestic iron ore production rises to record in June
Bloomberg reported that iron ore production in China, the world largest consumer of the commodity, rose to a daily record last month helping steelmakers cut imports.

Mr Daniel Kang HSBC analysts said daily output reached 3.4 million tonnes last month. That’s equivalent to an annualized output of 384 million tons of concentrate with 63% iron content compared with last year 238 million tonnes.

HSBC said China is ramping up domestic production to help cut its reliance on imports from Vale SA, BHP Billiton Ltd and Rio Tinto Group which account for three quarters of global trade. The domestic iron ore industry is profitable if prices exceed CNY 1,000 per tonne.

The analysts wrote in the report that “We expect iron ore imports to slow in coming months. We believe that these pricing levels will continue to encourage domestic miners to continue production at high levels.”

According to Beijing Antaike Information Development Co iron ore prices at Tangshan, Hebei province have risen for seven of the past eight days. Prices are up by 13% to CNY 1,130 per tonne from the CNY 1,000 per tonne price reached on July 2nd a four month low. The price is for ore with 66% content.

HSBC said China Ministry of Land and Resources has set a target of 1,100 million tonnes of domestic ore production by 2015 up by 25% from 875 million tons last year.