China: BF mills’ production rises for 5th week, but pace slows

• End-user steel demand recovers, inventories dip
• Finished tags rise, more mills see profits on sales

Mysteel: Chinese blast furnace (BF) steelmakers continued to raise production this week, driven by a further recovery in steel demand from end-users as well as positive margins the mills could enjoy, Mysteel’s latest survey showed.

During 21-27 March, the average capacity utilisation rate of the 247 BF steelmakers under Mysteel’s regular tracking rose for the fifth straight week to 89.1%, though the w-o-w increase was smaller at 0.4 percentage points.

Over the same period, the average operational rate among these sampled 247 mills also went up by 0.15 percentage points w-o-w to 82.1%, bringing their daily combined hot metal output higher by 0.4% w-o-w to 2.37 million tonnes (mnt)/day, according to the survey.

Mysteel’s other survey showed that the total steel inventories piled at mills and trading houses nationwide continued drawing lower this week, indicating that demand was growing. This encouraged steelmakers to produce actively.

Meanwhile, BF mills saw their profit margins improve thanks to a rebound in finished steel prices, which also facilitated their production. By Thursday, around 54% of the 247 steelmakers under Mysteel’s tracking managed to make some profits on steel sales, higher by 1 percentage point from a week ago.

Consequently, the total consumption of imported iron ore by the 247 BF mills Mysteel monitors averaged 2.93 mnt/d over 21-27 March, edging up 0.5% w-o-w.

As of 27 March, the total inventories of imported iron ore in all forms held by the same 247 steelmakers dipped 0.2% w-o-w to 91.1 mnt, the survey showed. After the previous active purchases, steelmakers slowed their pace of replenishing the feed ore in the past few days, only taking enough tonnage to meet their immediate production needs, market sources observed.

The existing stocks would be sufficient to last these mills for 31 days at their current usage rate, 0.2 days shorter than the previous period.

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