China's BF capacity use keeps climbing to 88.57%

Production among Chinese blast furnace (BF) steel producers posted further growth overall this week, though the mills did not see any improvement in their profit margins, Mysteel's latest survey showed.

During May 10-16, the BF capacity utilization rates among the 247 steelmakers under Mysteel's regular tracking averaged 88.57%, up by 0.9 percentage point from the previous period, while the hot metal production among these mills also went up 23,900 tonnes/day or 1% to reach 2.37 million t/d.

As such, the daily consumption of imported iron ore by these mills also rose to 2.89 million t/d over the same period, higher by 33,600 t/d or 1.2% from the previous period.

Over the latest survey week, however, the average operational rate among the sampled 247 mills under Mysteel's tracking stayed unchanged from the prior period at 81.5%.

The total capacity of the furnaces brought back onstream from maintenance stoppage this week was larger than that of the blown off ones, Mysteel Global noted. "The increase in the production was mainly contributed by the mills in (North China's) Hebei province," a market analyst based in Shanghai said.

Despite their growing output, the steelmakers remained cautious about procuring feed materials as their profit margins were still thin amid the continuous decline in domestic steel prices this week, market sources observed.

By May 16, some 52% of the sampled 247 mills could make profits on selling their steel products, unchanged from a week ago, Mysteel's survey showed.

Consequently, the total inventories of imported iron ore held by the same 247 steelmakers Mysteel tracks dipped 0.6% on week to reach 92.7 million tonnes as of May 16. The stocks would be sufficient to last them for 32 days at their current use rate, 0.6 day shorter than the previous period, Mysteel assessed.

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