China's blast furnace capacity dips after 2-week rise

The blast furnace (BF) capacity utilization rate among the 247 Chinese steelmakers under Mysteel's survey snapped a two-week rise and declined during September 8-14, down by 0.11 percentage point on week to sit at 92.65%. The mild drop was attributable to the suspension of some BFs at mills in North China, Mysteel found.

Market sources told Mysteel that another four BFs in Tangshan city in North China's Hebei province were halted for maintenance during the survey period, among which three furnaces located in Laoting county saw their overhauls only last for two days. As for the remaining one in Qian'an city, no specific time has been confirmed for when the furnace will restart, the sources added.

During the same period, these surveyed mills' BF operational rate also retreated 0.32 percentage point from a week ago to 84.07%, leading to a small 4,000 tonnes/day on-week loss in daily average hot metal output that still stood high at 2.48 million t/d as of September 14, Mysteel's survey showed.

Accordingly, the daily consumption of imported iron ore among the 247 sampled steel mills also shed slightly by 6,000 tonnes or 0.2% on week to reach 3.01 million t/d on average over September 8-14, the survey revealed.

It is worth pointing out that more Chinese steelmakers slipped into losses during the survey period, with only 42.86% of the 247 mills managing to secure some profits, down by 2.2 percentage points on week and marking a six-week losing streak, according to Mysteel's assessment.

The expanding losses among steel mills were partly caused by the ever higher portside prices for imported iron ore in China, a Shanghai-based market watcher said. On September 13, Mysteel PORTDEX 62% Australian Fines in Qingdao hit Yuan 942/wmt ($129.7/wmt) FOT and including the 13% VAT, refreshing the highest price since mid-March this year.

Nevertheless, total inventories of imported iron ore held by the sampled steelmakers climbed by 3.01 million tonnes or 3.5% on week to 88.32 million tonnes as of September 14 including the tonnage at their steelworks, port stockyards and on the water, according to Mysteel's tracking.

"Mills' imported iron ore stocks rose as they started to build up their feed material inventories ahead of China's National Day holidays that fall on September 29-October 6 this year," the market watcher explained.

Written by Irene Zhuang, zhuangailing@mysteel.com

Edited by Edited by Alyssa Ren, rentingting@mysteel.com

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