The blast furnace (BF) capacity utilization rate among 247 Chinese steel mills under Mysteel’s survey retreated from the prior week’s incline over December 30-January 5, down by 0.66 percentage point on week to settle at 81.93%, as steel mills’ persistently negative profit margins, coupled with the lukewarm downstream demand, had forced them to trim steel production.
Correspondingly, daily hot metal output among these surveyed mills dropped by 17,900 tonnes/day on week to 2.21 million t/d in total, and their BF operational rate had decreased for the third straight week by another 0.57 percentage point on week to 74.64% as of January 5, indicating that more BFs had been put under maintenance during the survey period.
Chinese steel producers reined in output after noting weak demand for steel this week when more construction companies halted work at building sites and started their Chinese New Year holiday break in advance of the official start in late January, Mysteel Global noted.
Over December 30-January 5, spot trading of construction steel among China’s 237 trading houses under Mysteel’s tracking decreased by 10.7% on week to average 98,880 t/d.
Moreover, the remaining razor-thin margins or losses also prompted more steel mills to place maintenance on their BFs. In tandem, a total of 11 BFs – mostly in North, East, Central and Northwest China – had been idled during the survey period. Mysteel’s other survey on these 247 steel mills showed that only 19.91% were making profits as of Thursday.
Subsequently, lower steel output saw the daily consumption of imported iron ore among the 247 surveyed mills decrease by 27,700 t/d on week to 2.72 million t/d on average over December 30-January 5.
By January 5, total inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water held by these 247 mills climbed by 4.52 million tonnes on week to 99.56 million tonnes. The total tonnage would be sufficient for 36.55 days of use, or 2.01 days longer than the previous survey period.
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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