China: Steel producers to cut production with winters approaching

Chinese steel producers have started to slow down production activities ahead of the 20th National Congress of the Communist Party. The meeting session would span over 16-22 October 2022. Moreover, with the winters approaching. steel mills shall have to reduce their capacity utilisation rates to ensure better weather conditions.

In purview of the above, four major steel producing companies in the Tangshan city, Hebei province have started repair works in their blast furnaces.

The entire Hebei province, including Handan and Shijiazhung, have plans to adjust their output levels from 14 October to 22 October 2022.

Steel makers having received ‘environmental grade A’ certificate shall have to reduce thier production activity by 30% over these eight days whereas others shall have to cut their production and sintering activities by 50%. Meanwhile, logistical activities shall also be restricted from 11:00 a.m. to 16:00 p.m. over the said period.

The molten iron production is expected to drop by 14,000 tonnes per day. However, a few industry participants opine that the same might be reduced by 82,000 t in Handan region only over the tenure of eight days.

Furthermore, post the National Day holidays, most of the blast furnaces have been shut down in Shaanxi province to reduce the production volumes.

Region-wise schedule of shut down is as follows-

Linfen region, Shaanxi Province:

• One BF of 1,280 m3 capacity has been shut down since 3 October.
• Two BFs of 550 m3 capacity have been shut down since 8 October.
• Two BFs of 530 m3 capacity have been shut down since 11 October.

Yangang and Qiuanjiujiang region, Shaanxi Province

• One BF of 1,080 m3 capacity has been shut down since 11 October.
• One BF 4,500 m3 capacity will be shut down for 68 days from 24 October.

The utilisation rate of 247 blast furnaces in China in late-September to early-October was 83.5%, up 0.69% from the previous week and 5.98% from the same period last year. As a result, China’s daily melted iron which was recorded to be 2.4 mnt in early October will decline due to a drop in demand and government’s complete cutback.

Note- This article has been published under an article-exchange agreement between SteelDaily and SteelMint.