China: BF mills’ output recovers w-o-w, margins improve further

• Mills ramp up operations as air pollution restrictions ease
• 38% of mills making profits, higher by 1 percentage point

Mysteel Global: Production among Chinese blast furnace (BF) steel mills increased overall during 26-31 December, as some mills in North China resumed operations amid improved air quality, Mysteel’s latest survey showed.

During the latest survey period, the average capacity utilisation rate among the 247 BF steelmakers nationwide under Mysteel’s tracking climbed up by 0.3 percentage point from the previous week to reach 85.3%, while their combined hot metal production also rose by 0.4% w-o-w to average 2.27 million tonnes (mnt)/day.

Over the same period, the average operational rate among these sampled mills went up by 0.6 percentage points w-o-w to 78.9%, the survey showed.

Last week, heavy air pollution in North and East China gradually eased, prompting local authorities to lift the production restrictions they had previously imposed on industrial firms to reduce emissions. This allowed local BF steelmakers to resume or ramp up production, Mysteel Global noted.

In parallel with the increase in hot metal production, these 247 BF steel mills consumed more imported iron ore, with the combined volume rising slightly by 0.2% w-o-w to average 2.81 mnt/d during 26-31 December, according to Mysteel’s tracking.

As of 31 December, the total inventories of imported iron ore in all forms held by these 247 steelmakers grew by 1% from a week earlier to reach 89.5 mnt, the survey showed. The existing stocks would be sufficient to last these mills for 31.9 days at their current usage rate, 0.3 day longer than the previous period, Mysteel assessed.

On the other hand, their improved profit margins also encouraged some BF steel mills to lift production last week, Mysteel Global noted.

By 31 December, around 38% of the 247 BF mills Mysteel monitors could make some profits on selling their steel products, higher by 1 percentage point from a week earlier.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.