- Blast furnace output stable despite shifting operations
- Weak steel prices and higher inventories compress margins
Mysteel Global: Production among Chinese blast furnace (BF) steelmakers remained flat for the second straight week during January 23-29, with most mills keeping operations stable, according to Mysteel’s survey.
During the latest survey period, the average capacity utilization rate among the 247 BF steel producers under Mysteel’s tracking stood at 85.5%, nudging lower by a minimal 0.04 percentage point from the previous week, while their combined hot metal production held steady on week at 2.28 million tonnes/day.
Over the same period, however, the average operational rate among these sampled mills increased by 0.3 percentage point on week to reach 79%, the survey showed.
In the past week, a few sampled blast furnaces were taken offline for overhaul, but more furnaces were brought back on stream after maintenance. The total capacity closed was largely the same as that restarted, according to the survey results.
The total consumption of imported iron ore by the 247 BF steelmakers Mysteel tracks averaged 2.81 million tonnes during January 23-29, slightly down by 0.3% from the previous week.
As of January 29, the total inventories of imported iron ore in all forms – including those at mills, in transit, and at ports – held by the same 247 steelmakers had increased by a marked 6.2% on week to reach a four-month high of 99.7 million tonnes, the survey showed.
Steel mills have been actively building up iron ore stocks lately so as to secure sufficient feed materials for their operations during the official Chinese New Year holiday over February 15-23, when most traders will close their businesses, Mysteel Global noted.
The existing stocks would be sufficient to last these mills for 35.5 days at their current usage rate, longer by 2.2 days than that for the previous survey period, Mysteel assessed.
On the other hand, Chinese BF steelmakers saw their profit margins shrink again due to the weakening of finished steel prices in the past week. As of January 29, only around 39% of the 247 BF mills under Mysteel’s tracking were able to make profits on their steel sales, lower by 2 percentage points from a week earlier.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint
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