The blast furnace (BF) capacity utilization rate among 247 Chinese steel mills had dipped for the second week by another 0.62 percentage point on week to 87.64% over October 21-27, as some steel mills continued to rein in output in response to their persistently thinning steel margins or even losses.
Accordingly, these mills’ hot metal output decreased by 16,700 tonnes/day on week to 2.36 million t/d on average during the latest survey period, and their BF operational rate also dropped by 0.57 percentage point on week to 81.48% as of October 27.
The prevailing bearish market sentiment amid lackluster steel demand from downstream users continued to weigh on Chinese steel prices, thus squeezing steelmakers’ profit margins or adding their losses, Mysteel Global noted.
Thus, “some mills across the country have continued to conduct maintenance works on their steelmaking facilities or slowed down their production,” a Shanghai-based market watcher observed.
As of October 27, the national price of HRB400E 20mm dia rebar, a bellwether of Chinese steel-market sentiment, edged down by Yuan 50/tonne ($6.9/t) on week to Yuan 3,989/t and including the 13% VAT, hitting a new low since July 18.
Meanwhile, Mysteel’s other survey showed that only 27.81% of the 247 mills were making profits as of Thursday, down by 10.82 percentage points on week and 53.68 percentage points on year.
During October 21-27, the daily consumption of imported iron ore among the surveyed mills decreased too by 15,100 t/d on week to 2.93 million t/d on average.
By Thursday, these 247 mills’ total inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water edged down by 179,300 tonnes on week to 94.13 million tonnes. The stocks were sufficient to last the surveyed mills for 32.14 days of use, or 0.1 day longer than the previous survey period.
Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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