Daily usage of imported iron ore sintering fines among the 64 Chinese steelmakers under Mysteel’s regular survey eased for a second week over November 10-16 to 495,500 tonnes/day on average, down by 9,400 t/d or 1.9% on week, the latest survey results showed. Market sources attributed the lower ore use to mills’ voluntary steel output cuts and local government-mandated curbs for pollution reduction.
The survey showed that steelmakers in the six surveyed regions all posted declines in their daily iron ore use, except for those in areas along the Yangtze River.
Recently, many steelmakers have continued to restrict their steel output because their steel margins remain poor and consumption among end-users shows no signs of improving, according to a Shanghai-based analyst.
For example, as of November 16, integrated mills in Tangshan were still losing an average of Yuan 84 ($11.8) on every tonne of billet they sold, despite the on-week recovery of Yuan 86/t, Mysteel’s tracking showed.
In fact, blast furnace capacity utilization among the 247 Chinese steel mills under Mysteel’s survey dipped by another 2.23 percentage points on week to 84.09% over November 4-10, hitting a new low since mid-August.
Meanwhile, steelmakers in Tangshan in North China’s Hebei were asked by local authorities to curb their sintering capacity by 30% over November 15-25 after air pollution over parts of the city worsened, as reported. Similarly, some mills in East China’s Shandong cut their sintering operations by 15%-30% from November 16, and when normal operations will resume has not yet been determined.
Meanwhile, steelmakers’ interest in buying iron ore has remained low recently, reflecting their thin margins and tough production curbs aimed at pollution control, the analyst observed.
Also, “the recent strengthening of imported iron ore prices made mills more cautious about procuring,” she added.
For example, Mysteel SEADEX 62% Australian Fines climbed to $97.85/dmt CFR Qingdao on November 16, higher by $8.35/dmt on week.
As a result, inventories of imported sintering fines stockpiled at the same 64 Chinese steel mills shrank for the third week by 63,100 tonnes on week to 11.1 million tonnes over November 10-16.
The existing tonnage should be enough to keep the mills operating for around 20 days, unchanged since the previous survey, Mysteel’s latest survey showed.
Written by Lea Li, liye@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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