Chinese iron ore production is slowing.
From Westpac Bank, it shows domestic Chinese production along with Chinese iron ore imports going back to 2005.
Right now, Chinese production has had its slowest start to a year since 2009, something that Westpac puts down to a renewed push from policymakers to help improve air quality in Northern Chinese regions.
“[This is a] result of controls put in place to reduce air pollution that led to the closure of smaller, less efficient furnaces, diverting steel production to larger more efficient furnaces,” it says.
“With three months of data, this is the slowest start to the year for Chinese iron ore production since 2009.
“It remains to be seen how much of this is just plain seasonal impact and how much is real, however, the size of the slowdown in production is certainly noteworthy.”
Despite the pullback in Chinese production levels, there has been a negligible impact on Chinese iron ore port inventory levels.
According to Reuters, citing data from Shanghai Steelhome, inventories currently sit at 160.28 million tonnes, just off the record high of 161.68 million tonnes set in March.
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