China's Blast furnace capacity use dips to 87.61%

Over June 24-30, the blast furnace capacity utilization rate among China's 247 steel mills had dipped for the second week by another 1.37 percentage points on week to 87.61%, indicating that some of the surveyed mills continued to trim production in response to their persistently thinned steel margins or even losses.

Accordingly, during the latest survey period, these mills' hot metal output decreased by 36,900 tonnes/day on week to 2.36 million t/d on average, while their BF operational rate had slid for the third week by another 1.13 percentage points on week to 80.79% as of June 30.

Although China's steel market sentiment has improved to some extent recently, the market is still under pressure as high temperatures and frequent rains in many regions across China keep affecting downstream steel demand, Mysteel Global noted.

Thus, "some steelmakers in North, East and Northeast China have continued to conduct maintenance on their steelmaking facilities or slowed down their production pace, considering the losses they had suffered," a Shanghai-based market watcher observed, adding that a total of 11 blast furnaces were idled during the survey period.

Meanwhile, Mysteel's other survey on these 247 steel mills showed that only 16% were making profits as of Thursday, 55.41 percentage points lower than the same period last year.

During June 24-30, the daily consumption of imported iron ore among the 247 surveyed mills decreased by 45,700 t/d on week to 2.87 million t/d on average.

By Thursday, total inventories of imported iron ore in all forms including the volumes at steelworks, port stockyards and on the water held by these 247 mills edged down by 1.72 million tonnes on week to 105.4 million tonnes. The stocks were sufficient to last the surveyed mills for 36.77 days of use, or 0.01 day shorter than during the previous survey period.

Written by Lindsey Liu, liulingxian@mysteel.com

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