China's blast furnace capacity use dips 3rd week to 89.82%

The blast furnace (BF) capacity utilization rate among 247 Chinese steel mills under Mysteel's survey had dropped for the third straight week by another 1.33 percentage points on week to 89.82% over July 21-27, as more steel producers across the country had further curtailed their output on the request of local authorities.
During the survey period, these 247 mills' daily hot metal output fell too by 35,800 tonnes/day on week to 2.41 million t/d in total, and their BF operational rate decreased by 1.46 percentage points on week to 82.14% as of July 27.

"Some steelmakers in northern regions of China have launched maintenance on their steelmaking facilities in response to local governments' request of production restrictions to improve air quality for weeks," a Shanghai-based market watcher observed.

Moreover, some more steel mills in North and East China confirmed that they have received verbal requests from authorities to ensure that their crude steel output for 2023 remains at the same level as last year, as reported. "This will make steelmakers more prudent in their overall production in the coming weeks," the market watcher commented.

In this scenario, the daily consumption of imported iron ore among these 247 sampled steelmakers fell further by 34,000 t/d on week to 2.94 million t/d over July 21-27.

Nonetheless, imported iron ore stocks at these mills declined over the same period as steelmakers maintained a cautious stance towards iron ore buying due to possible production curbs and the current off-season for steel consumption.

The total volume of mills' imported ore inventories in all forms including the tonnage at their steelworks, port stockyards and on the water edged down by 574,400 tonnes on week to 83.45 million tonnes as of July 27. The tonnage could last for 28.4 days of their use, or 0.13 day longer than the prior survey period, according to Mysteel's assessment.

Written by Lindsey Liu, liulingxian@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com

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