Poor weather delays eastern China river ports iron ore shipments

Fog, heavy rain and snow have slowed down the discharging of iron ore in several eastern China ports, resulting in vessel congestion and delays, sources said Friday.

Waiting time for vessels to berth at river ports stood in a range of five to fifteen days, sources said.

Impacted ports included Taicang, Nantong, Zhangjiagang, Zhenjiang, along the Yangtze river, sources said. Poor weather has caused port operations to halt intermittently, resulting in long vessel queues waiting for a berth to discharge.

“It [Vessel delays] has been happening constantly this winter season – either due to rain or strong winds — this time it is because of snow,” she added.

Several steel mills in southern China and traders reported shipment delays, incurring demmurage cost of between $12,000 to $15,000 per day.

The port congestion is likely to remain for another week as poor visibility, dense fog and strong winds continue to slow vessel movement and shut down port operations, sources said.

China’s national observatory upgraded its snowstorm warning to “orange alert” on Thursday, the second highest alert level, as heavy snow continues to hit central and eastern China.

61.5% Fe Australian Pilbara Blend fines was heard tradeable at Yuan 580/wmt at Taicang port, inclusive of Yuan 40/wmt port fee and 17% VAT, or at the equivalent of $80.10/dmt on import parity basis.

Sources also said river ports tend to command a Yuan 20/wmt premium against eastern China ports, or $2.95/dmt on import parity basis, due to additional freight costs.

This price was still much higher than the other sea ports, such as in East China’s Qingdao and Rizhao ports, which stood at Yuan 530/wmt inclusive of Yuan 27/wmt and 17% VAT, or at $72.73/dmt on import parity basis.

However, other sources also added that iron ore prices in south China also tended to be higher than other areas as these southern based mills were consuming more iron ore as they were not facing any winter season steel production cut restrictions, which had been imposed on their northern counterparts, Platts reported earlier.

Moreover, the impact on steel production has been negligible, as mills had built up sufficient iron ore and coking coal inventories to tide over any delay in seaborne shipments, sources said.

“Mills in the south had increased iron ore inventories, so there has been no impact on steel production so far,” an eastern China steel maker said. Poor weather in north China had also caused delays, with 20 days waiting time heard at Bayuquan port. However, iron ore prices stagnated due to high port stockpiles.

Platts iron ore 62%-Fe iron ore port stock index, or IOPEX North China (Jingtang and Caofeidian ports) was assessed at Yuan 587/dmt FOT, down Yuan 5/dmt on day, or at $75.14/dmt on import parity basis.

Source: PLATTS