Iron Ore Port Inventory and Port Pick-up Volume

As of October 16, China's 35 major iron ore ports held a total inventory of 148.3 million metric tons, marking a 2.85 million mt increase compared to the previous month. The average daily port pick-up volume, however, declined by 50,000 mt to 3.185 million mt. Despite a slight dip in iron ore port arrivals, demand-side performance proved even less promising.

Hot metal production in steel mill blast furnaces experienced a significant drop, which in turn weakened the demand for iron ore concentrates and contributed to the decline in port pick-up volume. Consequently, port inventory continued to mount overall, with arrivals expected to rise next week, and steel mill production potentially rebounding slightly.

However, steel mill profits are currently in deep losses, and procurement strategies are largely driven by immediate needs, leaving limited room for increased port pick-up volume. Even if demand shows marginal improvement, supply-demand dynamics remain loose, and port inventory is expected to persist. In the short term, iron ore fundamentals remain weak, and pressure on port inventories is unlikely to ease soon.

Close monitoring of steel mill profit recovery, the pace of hot metal production resumptions, and changes in port arrivals is advised.