China's blast furnace capacity use dips to 92.31% over holiday

The blast furnace (BF) capacity utilization rate among the 247 Chinese steelmakers under Mysteel's regular survey dipped to 92.31% over September 29-October 5 after a two-week rise, losing 0.77 percentage point from the previous week. More mills in North and Southwest China started maintenance works on their BFs during the country's Mid-Autumn Festival and National Day holidays (September 29 to October 6), Mysteel Global noted.

Accordingly, daily average output of hot metal among the sampled mills also edged lower to 2.47 million tonnes/day during the survey period, down by 19,800 t/d or 0.7% on week, while their operational rate dropped 0.76 percentage point on week to 83.41%, the survey showed.

"Some mills in (North China's) Shanxi province conducted maintenance stoppages because recently the losses on steelmaking had become unbearable for them," a market analyst based in Shanghai said.

Steelmakers nationwide have seen their profit margins shrinking continuously in the past two months, Mysteel's other survey showed, with only around 30% among the sampled 247 mills being able to make some profits as of October 5.

"The negative steel margins are likely to force more mills to suspend production in the coming weeks," the analyst commented.

On the other hand, a steel mill in Southwest China's Yunnan shut off a BF for capacity swap during the latest survey period, while the new furnace has not been ignited, leading the local hot metal output to decrease overall, Mysteel Global learned.

As such, daily consumption of imported iron ore among the 247 mills Mysteel tracks had dipped 0.1% on week to average 3.02 million t/d over September 29-October 5.

As of October 5, imported iron ore inventories held by these mills totalled 86.6 million tonnes, slipping by a marked 11.8 million tonnes or 12% on week after the previous three-week increase, as the mills generally stopped procuring feed materials during the eight-day holiday, according to Mysteel's survey. The inventory tonnage would be sufficient to last them for 28.7 days at their present usage rate, 3.9 days shorter than in the previous period, Mysteel Global notes.

Written by Anthea Shi, shihui@mysteel.com
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.