China's blast furnace capacity use falls 3rd week to 90.62%

The blast furnace (BF) capacity utilization rate among the 247 Chinese steelmakers under Mysteel's regular survey has dropped for the third consecutive week to reach 90.62% over October 13-19, with the decline at a faster pace of 1.31 percentage points from the prior week.

Accordingly, the daily average output of hot metal among these mills also fell 1.4% on week to 2.42 million tonnes/day, the survey showed.

During the latest survey period, 10 blast furnaces in the country were shut off for maintenance work, of which the total capacity was larger than that of the 11 furnaces that were brought back online this week, according to Mysteel's assessment.

As such, domestic hot metal output declined overall though the operational rate among the sampled 247 mills rebounded 0.14 percentage point on week to reach 82.34%.

"The decrease (in output) was mainly due to the production cuts among steelmakers in North and Northeast China where the mills saw the losses they incurred on steel sales keep widening," a market analyst in Shanghai explained.

During the survey period, less than 20% of the 247 steelmakers under Mysteel's tracking could enjoy some healthy profits, with the profitability touching the lowest level since early January this year.

With the production cuts, the daily consumption of imported iron ore among these sampled mills averaged 2.96 million t/d over October 13-19, lower by 535,000 t/d or 1.8% on week, Mysteel's tracking data showed.

Also, some mills in North China's Hebei province were keeping their sintering operations at a low level under the local government's production restriction request to ease air pollution, which also slowed their consumption of iron ore, Mysteel Global learned.

Consequently, imported iron ore inventories held by the 247 mills increased by 2.4 million tonnes or 2.7% on week to reach 90.8 million tonnes as of October 19, Mysteel's survey showed. The stocks would be sufficient to last them 30.7 days at their current use rate, 1.3 days longer than in the previous period, according to Mysteel's assessment.

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.