China: BF mills' production hits 3-month low amid approaching CNY holidays

• Steelmakers scale down production amid poor profits
  
  
• BFs in Wuhan, Shaanxi shut for maintenance till Feb
  
  

Mysteel: Production among Chinese blast-furnace (BF) steel producers continued to decline steadily, driven by increasing maintenance stoppages amid the approaching Chinese New Year, Mysteel's latest survey showed.

The average capacity utilisation rate of the 247 BF steelmakers under Mysteel's tracking fell for the seventh consecutive week by another 1 percentage point w-o-w to a three-month low of 84.55% during 27 December-2 January. Correspondingly, their daily hot metal production decreased by 26,700 tonnes (t) or 1.2% w-o-w to 2.25 million tonnes (mnt).

During the same period, the operational rate among these mills averaged 78.1%, down by 0.61 percentage points from the previous week, the survey showed.

Mysteel learnt that several steelmakers in Central China's Wuhan and Northwest China's Shaanxi had blown off their blast furnaces to start annual maintenance at the end of December, and these furnaces will not be brought on-stream until next month.

With the official Chinese New Year holiday approaching (over 28 January-4 February), domestic steelmakers are gradually scaling back production, as their profit margins show no signs of recovery.

By Thursday, only 48% of the 247 surveyed BF steelmakers reported some profits from steel sales, lower by 1 percentage point from the previous week.

In tandem with the decline in hot metal output, the daily consumption of imported iron ore by these mills averaged 2.81 mnt during 27 December-2 January, down by 27,500 t or 1% w-o-w.

Nevertheless, steel producers continued stockpiling their feed materials to ensure smooth operations during the week-long New Year holiday.

As of 2 January, total inventories of imported iron ore in all forms held by the 247 steelmakers had increased for the seventh consecutive week, by 2.1 mnt or 2.2% w-o-w to 98.6 mnt.

At their current consumption rate, these inventories will last for 35.1 days, 1.1 days longer than the previous period.

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