China’s pig iron output grew 5.4% on year to nearly 380 million tonnes over January-May, which was much lower than the 13.9% on-year rise in the country’s crude steel output over the same period or lower than the 8.7% on-year growth for the first four months, Mysteel Global noted from the latest release by the country’s National Bureau of Statistics (NBS) on the afternoon of June 16.
The slow-down in the on-year growth over the first five months was largely due to the fact that the country’s pig iron output declined 0.2% on year but gained 2.9% on year to around 78.2 million tonnes for May alone, though daily pig iron output slid by 0.5% on month to 2.52 million tonnes/day last month, Mysteel Global calculated based on the data.
Mysteel’s survey on China’s 247 blast-furnace steel mills showed that their blast furnace capacity utilization rate ranged 90.59%-91.41% for May against the 86.94%-89.93% for April, though they had increased steel scrap utilization in their steelmaking on noting the all-time high iron ore prices, which also contributed to lower pig iron growths than crude steel, as reported.
“Many Chinese steelmakers maintained relatively high operational levels despite the volatility in the domestic steel prices, as their steel margins had remained positive and relatively high,” a Shanghai-based analyst commented, and “most of them stayed afloat despite the serious slumps in the steel prices in the latter half of May,” he added.
China’s national price of HRB 400 20mm dia rebar under Mysteel’s assessment, soared to its record high of Yuan 6,348/tonne ($991/t) including the 13% VAT since the commencement of the assessment in early March 2011, and then plunged sharply to Yuan 5,017/t as of May 27.
The rebar margins among the BF mills, therefore, fell to around Yuan 200/tonne towards the end of May from over Yuan 1,000/t in the first half of last month, according to Mysteel’s calculation based on the prompt steel and raw materials prices.
Written by Victoria Zou, zyongjia@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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