Weekly: Chinese BF mills’ production rebounds again

• Chinese BF mills’ production rebounds after four-week decline.
• Weak steel demand and losses may limit output gains.

After falling for four straight weeks, production among Chinese blast furnace (BF) steelmakers increased again during the past week, with the increase contributed mainly by mills in North China, Mysteel’s latest survey showed.

Mysteel’s tracking showed that the average capacity utilization rate among the 247 BF steelmakers during 31 July -6 August rebounded by 0.9% point on week to reach 89.4%, and their combined daily hot metal output rose by 1% from the prior week to 2.38 million tonnes (mnt).

During the same survey period, the average operational rate among these 247 sampled steel mills also climbed by 0.5% point on week to 82.3%, the survey showed.

Many integrated steelmakers in Tangshan – the top steelmaking hub in North China’s Hebei province – had been required by local authorities to cut BF operating capacity by 20% during 25-29 July, as reported.

Entering this month, the mills gradually resumed normal operations with the removal of the government-mandated production curbs, Mysteel Global learned.

In tandem with the increase in hot metal production, the total consumption of imported iron ore by the 247 BF steelmakers under Mysteel’s monitoring also went up by 1% on week to average 2.91 million tonnes/day during 31 July-6 August .

As of August 6, the total inventories of imported iron ore in all forms held by the same 247 mills – including those at their works, in transit, and at ports – expanded 0.6% from a week earlier to 87.73 mnt, the survey showed.

The existing stocks would be sufficient to last these mills for 30.2 days at their current usage rate, shorter by 0.1 day from the previous period.

However, the increase in these steelmakers’ production may not be sustained in the coming week, as many mills are still struggling with negative profit margins and tepid steel demand, Mysteel’s survey suggests.

By August 6, only around 32% of the 247 sampled BF mills could make some profits on selling their steel products, lower by 2% points from the previous week, according to Mysteel’s tracking.

Note: This article is published as part of a content exchange agreement between Mysteel Global and BigMint.