China: Blast-furnace capacity utilization rises further to 81.5%

The blast furnace capacity utilization rate among the 247 Chinese steel mills under Mysteel's regular survey inched up for the second week over February 25-March 3, rising by another 3.88 percentage points on week to 81.49%, as some steel mills in North China ramped up output further, encouraged by healthy profit margins and their hopes for better sales, near-term.

Over the survey period, these 247 steel mills produced 2.2 million tonnes/day of molten iron on average, up 109,100 t/d on week, while the operational rate of their blast furnaces as of March 3 had also nudged up for the third week by another 1.29 percentage points on week to 74.72%.

The improved performance of the BF makers sprang from the fact that some steel mills in northern areas of China had beefed up production, a survey compiler observed. "The recent increase in steel prices has improved their profit margins, prompting mills to produce more," she explained.

Moreover, these steelmakers also believe that construction activities will pick up with the arrival of warmer spring weather, resulting in higher demand for steel among end-users, she noted.

As of March 3, China's national price of HRB400E 20mm dia rebar had edged up by Yuan 46/tonne ($7.6/t) on week to Yuan 4,949/t and including the 13% VAT, Mysteel's database shows.

Accordingly, over February 25-March 3, daily consumption of imported iron ore among the 247 surveyed steel mills increased by 152,000 t/d on week to 2.73 million t/d in total on average.

By Thursday, inventories of imported iron ore in all forms at the 247 surveyed mills including ore sitting at steelworks, port stockyards and on the water had decreased by 842,200 tonnes on week to 110.3 million tonnes, as Chinese steel mills remain wary of purchasing iron ore while prices are fluctuating. The tonnage will be sufficient for around 40.38 days of consumption, or 2.7 days shorter on week, Mysteel Global notes.

Written by Lindsey Liu, liulingxian@mysteel.com

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