Blast furnace capacity utilization rate among China’s 247 steel mills nationwide under Mysteel’s survey reversed down after two weeks of inclines over July 16-22, though the on-week drop was minor at 0.51 percentage point to 88.04%, as some steel mills in China had already started trimming their output on the instruction of their local authorities as part of the efforts to rein in the national steel output.
Over the survey period, these mills’ molten iron output ebbed marginally too by 13,500 tonnes/day on week to 2.34 million t/d in total, while the operational rate of their blast furnaces under the survey slid down for the second week by another 1.04 percentage points on week to 75.65% as of July 22, as more had been on maintenance, Mysteel’s data showed.
“Several steel mills in East China’s Jiangsu and Shandong have banked their blast furnaces under their government orders to reduce production,” a survey conductor explained.
China’s central government had mandated that crude steel output in 2021 should be below the level of 2020, as reported.
Lower blast furnace engagement led to less finished steel output too, as suggested by Mysteel’s other survey among China’s 184 mills, which showed that their production of the five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate reversed down to a four-month low of 10.3 million tonnes over July 15-21 after a short-lived rise in the prior week, or dropping 3.3% on week.
Lower output in both crude and finished steel, in turn, lent support to China’s domestic steel prices, and as of July 22, China’s national price of HRB400E 20mm dia rebar under Mysteel’s assessment gained for the third week by another Yuan 75/tonne ($11.6/t) on week to Yuan 5,342/t.
The concern on less demand for iron ore in the coming weeks, however, saw Mysteel SEADEX 62% Australian Fines decreased by $17.2/dmt on week to $201.4/dmt CFR Qingdao, or a low since May 31
During the survey period, daily imported iron ore consumption among the 247 steel mills, accordingly, decreased by 10,000 t/d on week to 2.89 million t/d on average, and by July 22, their inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water grew for the third week by another 201,200 tonnes on week to 115 million tonnes, which would be sufficient for 39.8 days of consumption, or up 0.21 day on week.
Over July 16-22, Mysteel’s other survey among a smaller sample of China’s 163 steel plants showed that their blast furnace capacity utilization decreased for the second week by 1.48 percentage points on week to 69.08% as of July 22.
Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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