Over October 29 – November 4, the blast furnace capacity utilization rate among the 247 Chinese steel mills under Mysteel’s regular tracking eased to 76.43%, or a new low since September 4 2019 after having subsided for the third week by another 2.4 percentage points, as more steel producers, especially in North China, had trimmed output either on curbing or thinning steel margins or even loss-making.
During the latest survey period, these mills’ daily molten iron output decreased for the third week too by another 64,200 tonnes/day on week to 2.05 million t/d in total, and the operational rate of their blast furnaces under the survey fell for the third week and more sharply by four percentage points to 70.9% as of November 4, hitting a new low since July 2.
With winter coming to China especially in North China, some areas have kicked off winter restriction on steel mills while for Tangshan in North China’s Hebei, it has stepped up the restrictions on some local steelmakers’ blast furnaces and sintering on poor air quality since October 27, Mysteel Global noted.
Moreover, “the lack of sintered ore amid the ongoing curbs on sintering machines in many parts of north China has propelled some local mills to hot idle their blast furnaces,” a Shanghai-based market watcher shared.
China’s winter restriction since 2018 tends to focus on coking and sintering curbing as they are the most polluting parts in steelmaking, Mysteel Global understands.
Other than the local authorities’ restrictive measures, bearish market sentiment and sliding finished steel prices have dampened Chinese steelmakers’ production enthusiasm in general, according to the Shanghai source.
China’s national composite price of the HRB400E 20mm dia rebar under Mysteel’s assessment, for example, decreased for the fourth week by Yuan 273/tonne ($42.6/t) on week to Yuan 5,084/t and including the 13% VAT as of November 4, or a new low since July 8.
By November 4, Mysteel’s survey among these 247 surveyed mills showed that their inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water, reversed from the prior week’s decline, up 4.4 million tonnes on week to 108.6 million tonnes.
The total stocks will be sufficient for 42.96 days, or 3.2 days longer on week in terms of their current daily consumption, which fell by 92,400 t/d on week to 2.53 million t/d in total on lower steel output, according to Mysteel’s survey.
Over the same survey period, Mysteel’s smaller-scale survey among China’s 163 steel plants showed that their blast furnace capacity utilization rate ebbed for the fourth week by another 3.47 percentage points on week to 57.31% as of November 4, or a new low since July 2.
~ 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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