July 22 (Bloomberg) -- Iron ore production in China, the world’s largest consumer of the commodity, rose to a daily record last month, helping steelmakers cut imports, according to HSBC Holdings Plc.
Daily output reached 3.4 million metric tons last month, HSBC analysts led by Daniel Kang said in a report dated July 21. That’s equivalent to an annualized output of 384 million tons of concentrate with 63 percent iron content, compared with last year’s 238 million tons, the report said.
China is ramping up domestic production to help cut its reliance on imports from Vale SA, BHP Billiton Ltd. and Rio Tinto Group, which account for three quarters of global trade. The domestic iron ore industry is profitable if prices exceed 1,000 yuan ($148) a ton, HSBC said.
“We expect iron ore imports to slow in coming months,” the analysts wrote in the report. “We believe that these pricing levels will continue to encourage domestic miners to continue production at high levels.”
Iron ore prices at Tangshan, Hebei province, have risen for seven of the past eight days. Prices are up 13 percent to 1,130 yuan a ton from the 1,000 yuan a ton price reached on July 2, a four-month low, according to Beijing Antaike Information Development Co. The price is for ore with 66 percent content.
China’s Ministry of Land and Resources has set a target of 1,100 million tons of domestic ore production by 2015, up 25 percent from 875 million tons last year, HSBC said.
China Vanadium Titano-Magnetite Mining Co., the second-largest operator of iron ore mines in Sichuan province, rose 11.2 percent, the biggest gain since its listing last October, to close at HK$2.77 in Hong Kong trading.
To contact the Bloomberg News staff on this story: Helen Yuan in Shanghai at email@example.com
To contact the editor responsible for this story: Andrew Hobbs at firstname.lastname@example.org.