The blast furnace (BF) capacity utilization rate among 247 Chinese steel mills Mysteel canvasses weekly retreated from the prior week’s incline by 0.78 percentage point on week to 88.26% over October 14-20, as some steelmakers had reined in their output either in response to local authorities’ mandate or their own thinning steel margins.
During the latest survey period, the 247 mills’ daily hot metal output fell by 21,000 tonnes/day on week to 2.38 million t/d in total, and their BF operational rate also decreased by 0.57 percentage point on week to 82.05%.
“The decline in hot metal output is mainly from North and Northwest China, as some mills in these areas have trimmed their steel output in response to local authorities’ air quality control measures during the 20th National Congress of the Communist Party of China (being held in Beijing over October 16-22),” a Shanghai-based market watcher commented.
Moreover, the recent cautious market sentiment amid lackluster steel demand continued to weigh on Chinese steel prices, thus further squeezing steelmakers’ margins or even adding losses to some mills, and dampening some mills’ eagerness to maintain production, Mysteel Global noted.
For example, China’s national price of HRB400E 20mm dia rebar under Mysteel’s assessment declined by Yuan 101/tonne ($13.9/t) on week to Yuan 4,039/t and including the 13% VAT, a new low since July 22.
Meanwhile, Mysteel’s survey showed that only 38.53% of the 247 mills managed to enjoy some healthy profit margins by Thursday, down 9.52 percentage points on week.
In tandem, a total of 12 BFs had been offline during the survey period, according to the market watcher. As a result, these surveyed mills’ consumption of imported iron ore also dropped by 16,700 t/d on week to 2.94 million t/d on average as of October 20, according to Mysteel’s data.
By Thursday, these 247 mills’ total inventories of imported ore in all forms including ore sitting at steelworks, port stockyards and on the water, increased by 345,100 tonnes on week to 94.32 million tonnes. The volume would be sufficient for 32.04 days of their consumption, or 0.3 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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