China's BF capacity use falls marginally

The production among Chinese blast furnace (BF) steelmakers ended a seven-week rising streak and retreated marginally this week, while the mills' profits improved with rising steel prices, according to Mysteel's latest survey.

Over May 17-23, the average BF capacity utilization rate among the 247 steel producers under Mysteel's regular tracking dipped 0.03 percentage point on week to reach 88.54%, with their hot metal output also falling 0.1% on week to 2.37 million tonnes/day.

Meanwhile, the operational rates among these sampled steel mills stood unchanged for the second straight week at 81.5%, the survey showed.

The total capacity of the furnaces blown off this week was slightly larger than that of the restarted ones, Mysteel Global noted.

However, the daily consumption of imported iron ore among the 247 steelmakers picked up over May 17-23, rising 2,100 t/d or 0.1% on week to reach 2.89 million tonnes, according to Mysteel's tracking.

"The mills in (East China's) Anhui and (Northwest China's) Xinjiang that brought their idled furnaces back onstream lifted the ratio of imported ore in their use of feed materials," a market analyst based in Shanghai said, noting that the availability of domestically-produced iron ore concs was tight in these regions.

On the other hand, the steel mills saw their profit margins recover with the strengthening of finished steel prices this week, which encouraged the mills to ramp up their procurement of raw materials to make sure they could keep production stable, Mysteel Global learned.

By Thursday, around 54% of the sampled 247 mills could make profits on selling their steel products, higher by some 2 percentage points from the prior week, Mysteel's survey showed.

Consequently, the total inventories of imported iron ore held by the same 247 steel mills Mysteel tracks reversed from the previous two-week drop and edged up 670,700 tonnes or 0.7% on week to reach 93.4 million tonnes as of May 23. The stocks would be sufficient to last them for 32.3 days at their current use rate, 0.2 day longer than the previous period, Mysteel assessed.

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