BIG NEWS! China’s chrome ore stocks in major ports fell below 3-million mt for the first time since the week of Apr. 20, 2018. Stocks fell to 2,827,000 mt from 3,133,000 mt the previous week. Still stocks are up from 2,219,000 mt at the beginning of the year.
The biggest drop came from smaller suppliers, with stocks from “others” down to 414,000 mt this week from 478,000 mt the previous week. Inventories of South African material were also down from 2,290,000 mt to 2,033,000 mt. However, stocks of Zimbabwean chrome ore increased 20,000 mt to 90,000 mt.
Analysts say Chinese buyers were looking for the cheapest chrome unit and bought from the smaller miners.
Meanwhile, there was a lot of talk about possible changes in Chinese bonded warehouses. Some sources say the bonded warehouses were refusing to take any more chrome ore, saying the ore takes up too much space and is just parked there to avoid adding to official port stocks. (Large South African suppliers reportedly used this trick to avoid paying the VAT and making sure it wasn’t cleared to avoid reporting).
However, another source said the Chinese government was pressing to get the material out of the bonded warehouses since some the ore was “leaked” into the market without paying the VAT.
There were also reports that the bonded warehouses were cracking down and forcing the owners to remove the ore after 90 days so it isn’t stored there indefinitely.
Others say not all the ports seem to have changed their policy.
Awaiting further word on this.