Tianjin bombings delay iron ore shipments to metallurgical plants

A series of explosions in China's northern ports in Tianjin led to road closures in a major port region. This has caused delays in the supply of iron ore to some metallurgical plants. The explosions took place in a warehouse of containers with hazardous toxic substances. The explosions killed at least 50 people and injured more than 700, according to media reports.

After the explosions, shipments to ports in the Nanjing and Binhai regions were stopped. Ports have also reduced the speed of ship unloading operations. Steel mills in the region fear shortages of raw materials for steel production, as most of the mills keep low levels of ore reserves at their facilities.

According to industry sources, the main factories in the region also transport the ore using trucks. Currently, due to the closure of roads leading to the ports, shipping operations have been severely curtailed, and the supply of ore from the ports of Jingtang and Kawfeidian in Tangshan City will result in high transport costs.

Road closures are unlikely to have a significant impact on the production of factories with large iron ore reserves. In addition, the road closures are unlikely to have a significant impact on the maritime iron ore market and are unlikely to last long.

Meanwhile, the price of iron ore, supplied by sea, rose slightly. However, this effect is likely to be short-lived. On the Shanghai Futures Exchange, the contract for rebar for delivery in January 2016 closed up 31 yuan per tonne to 2092 yuan per tonne ($ 330 per tonne), while the hot coil contract closed higher by 25 yuan per ton, 2094 yuan per ton.

The devaluation of the yuan is expected to boost the supply of steel products from the country, which in turn could boost demand for iron ore in the immediate short term.