Chinese BF mills’ production retreats, profit margins shrink further

During 29 May – 4 June, the average capacity utilization rate among the 247 BF steel producers under Mysteel’s tracking slid 0.1% point from the previous week to 90.2%, with their combined hot metal output also falling 0.1% on week to 2.41 million tonnes/day on average.

Meanwhile, the average operational rate of these 247 steelmakers also fell 0.2% point on week to 83.9%, the survey findings showed.

In the latest survey period, a few mills in East and Southwest China blew off their blast furnaces to start maintenance work, Mysteel Global learned.

Consequently, the total volume of imported iron ore consumed by the 247 BF steelmakers averaged 2.96 million t/d during 29 May-4 June, lower by 0.2% from the prior week.

As of 4 June, the total inventories of imported ore in all forms held by the same 247 mills – including at their works, in transit, and at ports – edged up 0.2% on week to 88.5 million tonnes (mnt), the survey showed.

The existing stocks would be sufficient to last these mills for 29.9 days at their current usage rate, longer by 0.1 day from the previous period, Mysteel assessed.

On the other hand, softening finished steel prices have caused more steelmakers to suffer margin losses recently, which also dented their enthusiasm for production, Mysteel’s other survey showed.

On 4 June, for example, Mysteel assessed China’s national spot price for HRB400E 20mm diameter rebar at RMB 3,412/tonne ($503.7/t) including the 13% VAT, lower by 0.3% on week.

As of the same day, around 59% of the 247 BF mills Mysteel monitors – about 146 mills – said could make some profits when selling their products, 3% points lower than during the previous week.

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