China's BF-based steel mills further rein in production

Enthusiasm for production among Chinese blast furnace (BF) steelmakers remained tepid this week, as steel demand from end-users waned further and profitability among the BF mills saw no improvement, Mysteel's latest survey showed.

Over May 31-June 6, the average BF capacity utilization rate of the 247 steelmakers under Mysteel's regular tracking was 88.14%, lower by 0.03 percentage point from the previous week, with their daily hot metal production also dipping 800 tonnes/day or 0.03% on week to 2.36 million t/d.

During the same period, the operational rates among these sampled BF mills averaged 81.5%, losing 0.15 percentage point on week, the survey showed.

The further decline in downstream steel demand earlier this week cooled sentiment in the domestic steel market, leading more mills to blow off their furnaces for maintenance, Mysteel Global learned.

During the first three workdays of this week, for example, the total trading volume of major construction steel products among the 237 trading houses across the country averaged 113,773 t/d, lower by 7.9% compared to the same period last week, according to Mysteel's tracking.

Weak demand plus bearish sentiment caused the prices of both steel and steelmaking raw materials to lose ground this week, Mysteel assessed. By Thursday, around 53% of the 247 steel mills Mysteel tracks could earn some profits on steel sales, unchanged from the prior week.

Despite the further dip in their production, the daily consumption of imported iron ore among these 247 steelmakers picked up 0.2% on week to 2.88 million t/d over May 31-June 6, Mysteel's survey showed.

On the other hand, the total inventories of imported iron ore in all forms held by these sampled mills nudged up 144,400 tonnes or 0.2% on week to reach 92.2 million tonnes as of June 6, and the stocks would be sufficient to last them for 32 days at their current use rate, unchanged from the previous period, Mysteel assessed.

Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.