China's blast furnace capacity use dips to 85.47%

Blast furnace capacity utilization rate among China’s 247 steel mills nationwide under Mysteel’s survey showed signs of easing again over August 13 -19 after one week of edging up, down 0.42 percentage point on week to 85.47%, as some steel mills in East China trimmed their output further in the context of Beijing’s call for lower steel output for 2021 and remaining slack steel demand domestically.

Over the survey period, these mills’ molten iron output, ebbed accordingly by 11,200 tonnes/day on week to 2.28 million t/d in total, while the operational rate of their blast furnaces under the survey reduced more substantially after two weeks of inclines, down 1.43 percentage points on week to 73.57% as of August 19.

“Several steel mills in East China’s Jiangsu and Shandong have launched routine maintenance on some of their blast furnaces in response to their local authorities’ request for lower steel output,” a survey conductor explained.

Besides, China’s steel prices had been softening since mid August and spot steel sales had been hovering low though fluctuation had been seen throughout the survey period, as spot trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 domestics traders Mysteel monitors, for example, averaged 166,266 t/d, or down 19,103 t/d or 10.3% on week.

Lower steel output indicated less iron ore demand and the pessimism in the iron ore market saw Mysteel SEADEX 62% Australian Fines decrease by $31.55/dmt on week to $129.25/dmt CFR Qingdao as of August 19, or a low since last December 14 2020.

By Thursday, inventories of imported iron ore at the 247 mills including the volumes including all the volumes at steelworks, port stockyards and on the water fell for the fourth week, down 1.43 million tonnes on week to 106 million tonnes, which would be sufficient for 38.2 days of consumption, or 0.08 day shorter on week, as the steel mills have been controlling their in-house stocks.

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 after three weeks of increases, down 0.59 percentage points on week to 69.23%, the data shows.

Written by Lindsey Liu, liulingxian@mysteel.com

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