China: Blast furnace capacity use hits 22-month high of 91.8%

The capacity utilization rate of blast furnaces operated by 247 Chinese steel mills under Mysteel's weekly survey had risen for a 14th consecutive week of April 7-13 to 91.8%, or a 22-month high since early June 2021, as most Chinese steelmakers showed little inclination to lower their output.

The rate inched up by another 0.6 percentage point on week and was also 5.38 percentage points higher on year. Specifically, these 247 sampled mills produced 2.47 million tonnes/day of hot metal in total, or 16,300 t/d on week, Mysteel's data showed.

Meanwhile, the operational rate of 247 mills' blast furnaces also rose to 84.74% as of April 13, up 0.44 percentage point on week.

A Shanghai-based market watcher learned that some blast furnaces in North, East and Southwest China resumed production over the survey period, while other blast-furnace mills elsewhere maintained their current production.

"Though demand for finished steel has been softening in the physical market due to the recent rainfalls in many parts of China, the current steel consumption is still seen better than the previous year," he observed.

Over April 7-13, the daily trading volume of rebar, wire rod and bar-in-coil among 237 trading houses across China under Mysteel's survey averaged 169,868 t/d, being higher than 161,061 t/d over the same period last year.

Moreover, "nearly half of the surveyed mills could enjoy some profit margins, which will support them to maintain production at high levels. While for those mills that were operating at breakeven point or even had negative profit margins, halting operations would mean more losses to them. So they chose to keep producing - not only to avoid more losses, but to keep their market share," he analyzed.

Higher steel output saw the daily consumption of imported iron ore among these 247 mills edge up by 12,000 t/d on week to 2.98 million t/d on average over April 7-13, Mysteel's data showed.

As of April 13, total inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water held by the surveyed mills decreased 204,000 tonnes on week to 91.63 million tonnes. The total tonnage would be sufficient for 30.71 days of their use, or 0.19 day shorter than the previous survey week.

Written by Lindsey Liu, liulingxian@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com

Note: This article is being written in accordance with an article exchange agreement between Mysteel Global and Steelmint.