No wonder Australian iron ore shipments to China have fallen this year – China’s crude steel output slumped to a seven month low in November thanks to falling profit-margins at mills and winter pollution controls on emissions in the major northern steel-producing cities and regions.
The November production data on Friday showed China produced a total of 77.62 million tonnes of steel last month, down 7.1% from the all-time record of 82.55 million tonnes in October.
It was the lowest level since April, according to Friday’s report from China’s National Bureau of Statistics on Friday.
But November’s output was still a very solid 15.8 above the 66.15 million tonnes produced in November last year.
An indication of the impact on Australia was the monthly Port Hedland export report (that’s Australia largest iron ore export port).
Iron ore exports to China fell to 32.981 million tonnes, down sharply from the June peak of more than 39.69 million and the lowest November export figure from Port headland since 2015.
China’s average daily output also dipped to the lowest level since April, at 2.59 million tonnes, according to Reuters.
But that was still much higher than the 2.2 million tonnes per day produced in November of last year.
Output over the first 11 months of the year was 857.37 million tonnes, up 6.7% on the same period last year, according to Friday’s report.
Analysts reckon December will see a similar fall, while January could see a boost in production (and imports and exports) ahead of the Lunar New Year holiday that starts February 2.
Reuters reported that big steelmaking cities such as Tangshan and Xuzhou have asked steel mills to further curtail output as city officials are concerned they will not meet their pollution reduction targets for the year.
“The government expects several bouts of heavy pollution to blanket northern China in December. The industrial heartland of Hebei, Shandong and even the southwestern province Sichuan have issued smog alerts last week.
