On Feb 12, the two new steel mills in Tangshan are set to undergo maintenance with the shutdown of 3 blast furnaces, affecting to around 8,400 MT of hot iron output per day. It is also learned that another 3 BF is under plan for maintenance, affecting 16,500 MT of daily hot iron output.
As of now, 26 blast furnaces out of 120 of the 32 steel mills in Tangshan have been shut down, affecting to around 71,000 MT hot iron output per day, accounting for 18.1% of total daily hot iron capacity in the city. Among them, 13 BFs are under maintenance on account of heating season, affecting 36,500 MT hot iron output daily while remaining 13 BFs are under maintenance because of pandemic, affecting 35,200 MT daily hot iron output. Up to Feb 12, the operating rate of BF in Tangshan would be 78.33%, down 2.5% W-o-W, and capacity utilization rate would stand at RMB81.87%, down 2.13% W-o-W.
Survey revealed that of the BFs which are stopped due to pandemic, 70% are on account of high level of inventory with difficulty of placement of steels or capital strain. These mills are likely to resume operation when demand from downstream recovers, so that pressure on inventory can be relieved. The mills are estimated to be resumed in late Feb. Based on this, the monthly output of hot iron in Feb in Tangshan may go down to 1,015 MnT, by 9.1% from Jan level.
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