China: Blast furnace capacity utilization eases to 91.7%

Blast furnace (BF) capacity utilization rate among China’s 247 steel mills nationwide under Mysteel’s survey showed signs of easing over June 4-10, as it reversed down from a nine-week small inclines, though the on-week difference was only at 0.2 percentage point to 91.69%, as the thinning steel margins and weakening demand in the hot and humid summer are leading to less output.

Over the survey period, these mills’ molten iron output, ebbed marginally by 5,300 tonnes/day on week to 2.44 million t/d in total, while the operational rate of the blast furnaces under the survey slid down for the second week by another 0.52 percentage point on week to 80.34% as of June 10, Mysteel’s data showed.

“Several steel mills in North and East China have launched routine maintenance on some of their blast furnaces, with one sharing that lower steel margins prompted the action,” a survey conductor explained.

Mysteel’s survey showed that the rebar margins among the BF mills averaged Yuan 224/tonne ($35/t) including 13% VAT by June 10, based on the steel and raw materials prices at present, which was much lower than the over Yuan 1,000/t level for April and until mid-May.

Nevertheless, China’s overall steel production was still relatively high, and it had been lending support to steelmaking prices, and as of June 10, Mysteel SEADEX 62% Australian Fines, thus, went up $4.2/dmt on week to $215.05/dmt CFR Qingdao, Mysteel Global noted.

By Thursday, inventories of imported iron ore at the 247 mills including the volumes at plants, port stockyards and on the water, fell for the second week by another 91,800 tonnes on week to 116.9 million tonnes, which would be sufficient for 38.83 days of consumption, or 0.02 day longer on week.

Over the same survey period, Mysteel’s smaller-scale study among 163 steel plants across China showed that their BF capacity utilization also reversed down, though by merely 0.31 percentage point on week to 74.12% as of June 10.

Written by Victoria Zou, zyongjia@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.