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Thursday, 04 June 2020 08:10

COVID-19’s initial impact to reduce China’s iron ore output by 3% in 2020, says GlobalData

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China’s iron ore production is forecast to decline by 3% to 78.2 Mt in 2020 due to the impact of Covid-19. Between January and February, the operating rates at private iron ore mines declined from 34.9% to 29.6% and overall, China’s iron ore production declined by 4.6% year-on-year, says GlobalData, a leading data and analytics company. 

Several mines and plants had to temporarily cease the production activities. The deliveries and shipments were either delayed or rescheduled, and there was a shortage of workers, who could not return to mine sites owing to the prolonged Lunar new year holidays, followed by the transportation issues due to lockdown. 

Vinneth Bajaj, Senior Mining Analyst at GlobalData, says: “As a result of the slowdown in the domestic production, iron ore imports grew by 1.5% year-on-year in January and February 2020 to reach 176.8 Mt. However, purchases accumulated at ports due to transportation challenges, owing to the lockdown and inventory at ports had reached a three-month high of 131.1 Mt by 7 February 2020.” 

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GlobalData forecasts the iron ore production in China to grow at a compound annual growth rate (CAGR) of 1.1% between 2020 and 2024 to reach 81.6 Mt.  

Bajaj concludes: “The growth will be relatively flat due to the elimination of inefficient steel capacity, as part of the three-year ‘Blue Sky’ environmental initiative, which runs from 2018 to 2020. This initiative is driving domestic steelmakers to utilise high-grade iron ore (Fe 58-62%), which principally originates from Australia and Brazil.

  • Quotes provided by Vinneth Bajaj, Senior Mining Analyst at GlobalData
  • This press release is written using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

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