Blast furnace capacity utilization rate among the 247 steel mills across China under Mysteel’s survey continued the climb for the seventh week over May 14-20, inching up another 0.31 percentage point to 91.18% on average, indicating that most Chinese steel mills have maintained high output on remaining high margins despite recent prices tumbles in steel and raw materials.
Over May 14-20, these mills’ molten iron ore output, thus, grew marginally by 8,300 tonnes/day on week to 2.43 million t/d, though the operational rate of the blast furnaces under the survey edged down by 0.13 percentage point on week to 80.21% over the survey period, Mysteel’s survey showed.
China’s steel and iron ore prices have both experienced drastic corrections since May 13 amid the repeated warnings from the central government on too high bulk commodities prices.
As of May 20, China’s national price of HRB 400E 20mm dia rebar under Mysteel’s assessment fell by a total of Yuan 914/tonne ($142/t) from May 12 to Yuan 5,434/t including 13% VAT, or having lost almost all the gains after the Labour Day holiday.
The declines in iron ore prices, in contrast, were milder with Mysteel SEADEX 62% Australian Fines iron ore index down $25.75/dmt from its record high on May 12 to $207.95/dmt CFR Qingdao as of May 20, or having persisted the $200/dmt threshold for 12 days.
Despite all the volatility, “in general, most of the steel mills have been keeping their production stale on relatively healthy steel profit margins,” a Shanghai-based analyst commented.
Mysteel’s survey showed that rebar margins, though having declined from previous high at over Yuan 1,000/tonne, was still around Yuan 375/t including 13% VAT by May 20, according to Mysteel’s assessment based on steel and raw materials prices at present.
By May 20, inventories of imported iron ore at these 247 mills including the volumes at plants, port stockyards and on the water, remained largely stable, down merely 289,400 tonnes on week to 115.7 million tonnes, which could last 38.57 days, or 0.23 day shorter on week, and their daily consumption went up slightly by 9,800 t/d to 3 million t/d in total, Mysteel’s tracking showed.
Over the same survey period, Mysteel’s smaller-scale study among 163 BF steel plants across China also gained though merely 0.33 percentage point on week in their BF capacity utilization to 73.98%.
Written by Victoria Zou, zyongjia@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Leave a Reply