Chinese BF mills’ output edges up again after lifting of production curbs

• Average capacity utilisation reaches 90.2%, up 5.1% w-o-w
• Consumption of iron ore rises by 5.7% w-o-w

MySteel: After falling significantly in the previous week, production among Chinese blast furnace (BF) steel producers snapped back swiftly this week following the lifting of mandated production curbs in North China late last week, Mysteel’s latest survey showed.

During September 5-11, the average capacity utilization rate among the 247 BF steelmakers under Mysteel’s regular tracking jumped 4.4 percentage points on week to reach 90.2%, with the combined output of hot metal averaging 2.41 million tonnes/day, higher by 5.1% from the previous week.

During the same period, the average operational rate among these 247 sampled mills also increased by 3.4 percentage points on week to 83.8%, the survey showed.

Many BF steelmakers in North China’s Hebei province had observed production curbs mandated by local governments to improve air quality, and those mills generally resumed normal operations at the end of last week, as reported. This led to the marked increase in domestic hot metal output overall, Mysteel Global noted.

In parallel with the production recovery, total consumption of imported iron ore by the same 247 mills increased by 5.7% on week to 2.97 million t/d during September 5-11, Mysteel’s tracking data showed.

As of September 11, the total inventories of imported iron ore in all forms held by the 247 mills also picked up by 0.6% on week to reach 89.9 million tonnes, the survey results showed. The existing stocks would be sufficient to last these mills for 30.3 days at their current usage rate, shorter by 1.5 days from the previous period, Mysteel assessed.

However, production activity at BF steelmakers is expected to weaken in the coming weeks, pressured by their shrinking profit margins and still-lackluster steel demand from end-users, Mysteel’s survey suggests.

By September 11, around 60% of the 247 steelmakers under Mysteel’s monitoring could earn some profits from selling their steel products, lower by 1 percentage point than a week ago.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.