China: BF capacity use remains high at 94.25%

The blast furnace capacity utilization among the 247 Chinese steel mills persisted at the plateau of 94.25% by September 17, despite having inched down for the fifth week over September 11-17, as most Chinese steel mills showed little inclination to lower their output substantially, according to Mysteel's latest weekly survey.

The rate inched down by a tiny 0.06 percentage point on week, which was still 5.28 percentage points higher on year, and these surveyed mills' molten iron output during the latest survey period approximated 2.51 million tonnes/day in combination, or down merely 1,700 t/d on week, according to the survey.

Over the survey period, the operational rate of their blast furnaces nudged down too by another 0.26 percentage point on week to 90.63%, according to Mysteel's database.

"China's steel market sentiment has been down a bit, but the actual finished steel demand has been there," a Shanghai-based market watcher told Mysteel Global.

Chinese steel mills, however, have not been disheartened by the overall gloominess in the market, still producing at high levels, as "they are still enjoying positive steel margins", she added.

The Chinese steel market optimism had been dampened mainly as the reality has not matched the expectation, market sources agreed.

Over September 11-17, the trading volume of rebar, wire rod, and bar-in-coil among China's 237 traders went up 8,660 t/d or 4.1% on week to 221,927 t/d on average, according to Mysteel's survey, which was a decent trading level in a robust demand season.

Besides, stocks of five major finished steel products including rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate at the commercial warehouses in China's 132 cities decreased for the second week by 168,500 tonnes or 0.7% on week to 22.85 million tonnes as of September 17, with the decline pace accelerated from the prior week's 3,400 tonnes, Mysteel's data shows.

Over the same survey period, Mysteel's survey on a smaller sample of 163 blast-furnace steel plants across China showed a different trend, as their furnace capacity utilization rate reversed up by 0.09 percentage point on week to 78.05% after having slipped down for five weeks.

By September 17, inventories of all imported iron ore at the 247 mills - including the tonnage at their plants, the ports, and on the water - increased for the fourth week by another 1.52 million tonnes on week to 113.3 million tonnes, and their daily fines consumption recovered after four weeks of declines, up 2,100 t/d on week to 3.12 million t/d in total over September 11-17. The existing stocks will support them for 36.35 days of consumption at the present rate, or 0.47 day longer on week.

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

Photo: World Steel