China BF capacity use at record high of 94.5%

The capacity utilization rate of blast furnaces operated by the 247 Chinese steel mills under Mysteel's survey rose for the second consecutive week over July 24-30 to 94.5%, a record high since Mysteel commenced the survey in March 2018, as most steel mills had maintained high production amid positive steel margins and expectations of increasing demand after the wet season.

The utilization rate was higher by another 1.43 percentage points on week, and accordingly, these mills' daily molten iron output also increased by 38,000 tonnes/day on week to 2.52 million t/d in total as of July 30.

Over the survey period, the operational rate of their blast furnaces nudged up another 0.13 percentage point on week to 91.15%, according to Mysteel's database.

China's domestic steel demand from end-users firmed, with Mysteel's daily tracking among the 237 trading houses across China showing that daily trading volume of construction steel including rebar, wire rod and bar-in-coil averaged 208,384 t/d, Mysteel's data shows, still well above the normal, pre-pandemic level of 200,000 t/d.

On the other hand, with the end of the wet season, most steel mills expect downstream steel demand to recover further, as the scorching weather's influence on steel demand is lighter than the frequent rains' effect, Mysteel Global noted.

Despite the increase in production costs from persistently high raw materials prices and recent fluctuation in steel prices, the domestic steel mills have been enjoying positive steel margins, according to market sources.

By July 30, inventories of all imported iron ore held by the 247 mills - including stocks at their works, the ports, and still on the water - had increased by another 2.1 million tonnes on week to 110 million tonnes, Mysteel's other survey showed.

The iron ore stocks would be sufficient for 35.45 days, or 0.01 day shorter on week, as the makers' daily imported iron ore consumption reversed up by 60,600 t/d on week to 3.1 million t/d, according to the survey.

Over the same week, Mysteel's survey of a smaller sample of 163 blast-furnace steel plants across China showed that their furnace capacity utilization rate increased too by 0.55 percentage point to 79.49%.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.

Photo: World Steel